Stocks sag to more than 3-year low
By Ye Zhen |
July 17, 2012, Tuesday
|
Print Edition
Print Edition
SHANGHAI'S stock market yesterday plunged to its lowest level since March 2009 after Premier Wen Jiabao warned difficult times are still ahead for the economy.
The Shanghai Composite Index fell 1.74 percent to close at 2,147.96 points.
The benchmark index has fallen 2.3 percent this year.
"China's economy is still expanding at a rate within the government target range set at the beginning of this year," Wen said on Sunday in Chengdu, Sichuan Province. "But we should be clear that China's economic rebound is not yet stable, and economic hardship may continue for a period of time."
Property developers fell after Zhuhai City's attempt to relax property curbs was halted by the central government within five hours of being announced. Poly Real Estate, the country's second-largest listed developer, shrank 4.1 percent to 12.27 yuan (US$1.92). Gemdale Corp fell 2.8 percent to 6.70 yuan.
Investors were also concerned about the upcoming corporate earnings season.
"Earnings have been quite bad so don't expect the market to be up in the near term," said Chen Liqiu, a strategist at Jianghai Securities Co in Shanghai. "I doubt the other companies will release better-than-expected earnings. There's still hope for policy loosening but the next rate cut will come in August at the earliest."
Publicly traded Chinese companies release their interim earnings reports in July and August. The companies on the Shanghai and Shenzhen stock exchanges are expected to post a 4.2 percent decline in second-quarter profit, according to Haitong Securities Co.
Electronics providers slumped after Suning Appliance Co said its net profit in the first half year may drop as much as 30 percent. Hisense Electric Co lost 5.5 percent to 9.05 yuan. Universal Scientific Industrial (Shanghai) Co skidded 6 percent to 11.14 yuan.
"The bottoming out in the market may be delayed as policies have had no obvious effect as of yet," Haitong Securities said in a report yesterday.
The Shanghai Composite Index fell 1.74 percent to close at 2,147.96 points.
The benchmark index has fallen 2.3 percent this year.
"China's economy is still expanding at a rate within the government target range set at the beginning of this year," Wen said on Sunday in Chengdu, Sichuan Province. "But we should be clear that China's economic rebound is not yet stable, and economic hardship may continue for a period of time."
Property developers fell after Zhuhai City's attempt to relax property curbs was halted by the central government within five hours of being announced. Poly Real Estate, the country's second-largest listed developer, shrank 4.1 percent to 12.27 yuan (US$1.92). Gemdale Corp fell 2.8 percent to 6.70 yuan.
Investors were also concerned about the upcoming corporate earnings season.
"Earnings have been quite bad so don't expect the market to be up in the near term," said Chen Liqiu, a strategist at Jianghai Securities Co in Shanghai. "I doubt the other companies will release better-than-expected earnings. There's still hope for policy loosening but the next rate cut will come in August at the earliest."
Publicly traded Chinese companies release their interim earnings reports in July and August. The companies on the Shanghai and Shenzhen stock exchanges are expected to post a 4.2 percent decline in second-quarter profit, according to Haitong Securities Co.
Electronics providers slumped after Suning Appliance Co said its net profit in the first half year may drop as much as 30 percent. Hisense Electric Co lost 5.5 percent to 9.05 yuan. Universal Scientific Industrial (Shanghai) Co skidded 6 percent to 11.14 yuan.
"The bottoming out in the market may be delayed as policies have had no obvious effect as of yet," Haitong Securities said in a report yesterday.
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