Stocks fall to 2009 levels as manufacturing slows
By Feng Jianmin |
October 1, 2011, Saturday
|
Print Edition
Print Edition
SHANGHAI'S benchmark stock index yesterday fell to its lowest close since April 2009, after data showed China's manufacturing activities have shrunk for a third month.
The Shanghai Composite Index dipped 0.3 percent to 2,359.22 points.
The gauge slid 8.1 percent in September, capping a quarterly loss of 15 percent, the largest since the three months through June 2010.
"Disappointment is expanding, and large investors chose to stand by before the holidays," the HSBC Jintrust Fund Management Co wrote in a report. "Inflation remains high, and the government will have to be tight on liquidity, which will result in a drop of company performance and share prices."
Jintrust was cautious about the market in the fourth quarter as inflation in September may top 6 percent and will not ease significantly after that.
The European crisis is being delayed but not solved and global markets haven't reached their bottom yet, the fund manager added.
HSBC Holdings Plc and Markit Economics yesterday said China's Purchasing Managers' Index for September was 49.9 - unchanged from August. This was higher than a pre-reading of 49.4 released last week. A reading below 50 indicates contraction.
"Although the lagged effects of credit tightening will continue to cool industrial activity in the months ahead, there is little need to worry about a sharp slowdown," said Qu Hongbin, an economist at HSBC in Hong Kong.
"Despite the global slowdown, we expect China's economic growth to hold up at around 8.5-9 percent in the coming years."
Construction-related stocks led falls amid concerns of slower manufacturing. Anhui Conch Cement Co, China's largest cement producer, lost 2.6 percent to 17.20 yuan (US$2.69). Sany Heavy Industry Co, the biggest Chinese machinery maker, dropped 2.6 percent to 14.41 yuan.
The official PMI, which is weighted toward larger enterprises, will be released by the China Federation of Logistics and Purchasing today.
Shanghai's stock market is closed until October 9 for the National Day holiday.
The Shanghai Composite Index dipped 0.3 percent to 2,359.22 points.
The gauge slid 8.1 percent in September, capping a quarterly loss of 15 percent, the largest since the three months through June 2010.
"Disappointment is expanding, and large investors chose to stand by before the holidays," the HSBC Jintrust Fund Management Co wrote in a report. "Inflation remains high, and the government will have to be tight on liquidity, which will result in a drop of company performance and share prices."
Jintrust was cautious about the market in the fourth quarter as inflation in September may top 6 percent and will not ease significantly after that.
The European crisis is being delayed but not solved and global markets haven't reached their bottom yet, the fund manager added.
HSBC Holdings Plc and Markit Economics yesterday said China's Purchasing Managers' Index for September was 49.9 - unchanged from August. This was higher than a pre-reading of 49.4 released last week. A reading below 50 indicates contraction.
"Although the lagged effects of credit tightening will continue to cool industrial activity in the months ahead, there is little need to worry about a sharp slowdown," said Qu Hongbin, an economist at HSBC in Hong Kong.
"Despite the global slowdown, we expect China's economic growth to hold up at around 8.5-9 percent in the coming years."
Construction-related stocks led falls amid concerns of slower manufacturing. Anhui Conch Cement Co, China's largest cement producer, lost 2.6 percent to 17.20 yuan (US$2.69). Sany Heavy Industry Co, the biggest Chinese machinery maker, dropped 2.6 percent to 14.41 yuan.
The official PMI, which is weighted toward larger enterprises, will be released by the China Federation of Logistics and Purchasing today.
Shanghai's stock market is closed until October 9 for the National Day holiday.
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