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Stocks fall most in month on slowing GDP
By Hu Xiaocen |
March 6, 2012, Tuesday
|
Online Edition
Online Edition
SHANGHAI stocks today tumbled the most in a month on slowing economic growth.
The Shanghai Composite Index slumped 1.41 percent to 2,410.45 points at the close of trade – the biggest daily loss in percentage since February 8. Turnover stood at 100.7 billion yuan (US$16 billion).
The index has dropped for two straight days after Premier Wen Jiabao trimmed China's growth target to 7.5 percent this year from an 8 percent goal in place since 2005.
Wen said expanding domestic demand is essential for the country's development.
"Overseas investors stayed negative about the lower target, the Heng Seng Index performed even worse than the Shanghai gauge. Market sentiment is sluggish amid growing systematic risks," said Zhang Gang, analyst at Southwest Securities.
Other analysts did not share Zhang's view. Analyst at Huaxi Securities, Cao Xuefeng said the market was in the midst of a correction, and will continue to rebound in the future. He recommended that investors include consumer goods stocks in their portfolios.
"The index will climb to 2,700 points in the first quarter," Cao projected.
Producers of building materials lost on speculation that slowing growth will curb demand for their products. Anhui Conch Cement Co, China's largest cement producer, slumped 4.39 percent to 17.19 yuan. Fujian Cement lost 3.05 percent to 8.59 yuan. Jiangxi Wannianqing Cement Co dropped 3.17 percent to 12.85 yuan.
The Shanghai Composite Index slumped 1.41 percent to 2,410.45 points at the close of trade – the biggest daily loss in percentage since February 8. Turnover stood at 100.7 billion yuan (US$16 billion).
The index has dropped for two straight days after Premier Wen Jiabao trimmed China's growth target to 7.5 percent this year from an 8 percent goal in place since 2005.
Wen said expanding domestic demand is essential for the country's development.
"Overseas investors stayed negative about the lower target, the Heng Seng Index performed even worse than the Shanghai gauge. Market sentiment is sluggish amid growing systematic risks," said Zhang Gang, analyst at Southwest Securities.
Other analysts did not share Zhang's view. Analyst at Huaxi Securities, Cao Xuefeng said the market was in the midst of a correction, and will continue to rebound in the future. He recommended that investors include consumer goods stocks in their portfolios.
"The index will climb to 2,700 points in the first quarter," Cao projected.
Producers of building materials lost on speculation that slowing growth will curb demand for their products. Anhui Conch Cement Co, China's largest cement producer, slumped 4.39 percent to 17.19 yuan. Fujian Cement lost 3.05 percent to 8.59 yuan. Jiangxi Wannianqing Cement Co dropped 3.17 percent to 12.85 yuan.
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