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Stocks tumble on bleak GDP forecast
By Hu Xiaocen |
January 18, 2012, Wednesday
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Online Edition
Online Edition
SHANGHAI stocks tumbled after yesterday's rally, as the Chinese Academy of Sciences forecasted a weaker growth in China's 2012 gross domestic product and lower housing prices.
The Shanghai Composite Index fell 1.39 percent to 2,266.38 points at the close, with a turnover of 80.7 billion yuan (US$12.8 billion), the highest level in a week. All sectors fell across the board except the cement industry and nonferrous metals producers.
The United Nations issued a report yesterday, saying China's GDP is expected to grow 8.7 percent in 2012. The Chinese Academy of Sciences was more conservative in its forecast, predicting 8.5 percent - 0.7 percentage points lower than 2011. The Consumer Price Index is expected to range between 3.6 to 4 percent, while housing prices are seen to drop 5.3 percent from last year, said CAS in an economic projection report.
"The A-share market is expected to recover from its tumble in 2011," said China Center for Market Value Management in a report. "The market will grow at a steady pace, however a domestic economic slowdown and global market instability will affect the growth of the A-share market."
The World Bank has lowered its forecast for developing countries' growth in 2012 from 6.2 to 5.4 percent, reflecting its concerns about a slowdown of emerging economies induced by raising policy rates amid skyrocketing inflation and the European crisis.
"China's economy is facing severe challenges against the unstable global markets," said Wen Lijun, analyst at Nanjing Securities. "Recent policies and measures by the securities regulator will ease market pessimism. Investors are suggested to take a breather until the holiday ends."
China's new home prices fell for the third consecutive month in December, according to the National Bureau of Statistics. Average new home prices fell 0.3 percent from November across the country. Fifty-two cities out of 70 being monitored posted lower prices.
"Commercial housing sales and new housing construction will continue to fall in 2012 as the government sticks with property controls," said Wang Tao, chief economist at UBS Securities.
Developers fell 1.52 percent. China Vanke Co, the nation's largest developer dropped 0.92 percent to 7.51 yuan. Poly Real Estate Group lost 2.22 percent to 10.12 yuan. China Merchants Property Development slumped 3.53 percent to 17.78 yuan.
The Shanghai Composite Index fell 1.39 percent to 2,266.38 points at the close, with a turnover of 80.7 billion yuan (US$12.8 billion), the highest level in a week. All sectors fell across the board except the cement industry and nonferrous metals producers.
The United Nations issued a report yesterday, saying China's GDP is expected to grow 8.7 percent in 2012. The Chinese Academy of Sciences was more conservative in its forecast, predicting 8.5 percent - 0.7 percentage points lower than 2011. The Consumer Price Index is expected to range between 3.6 to 4 percent, while housing prices are seen to drop 5.3 percent from last year, said CAS in an economic projection report.
"The A-share market is expected to recover from its tumble in 2011," said China Center for Market Value Management in a report. "The market will grow at a steady pace, however a domestic economic slowdown and global market instability will affect the growth of the A-share market."
The World Bank has lowered its forecast for developing countries' growth in 2012 from 6.2 to 5.4 percent, reflecting its concerns about a slowdown of emerging economies induced by raising policy rates amid skyrocketing inflation and the European crisis.
"China's economy is facing severe challenges against the unstable global markets," said Wen Lijun, analyst at Nanjing Securities. "Recent policies and measures by the securities regulator will ease market pessimism. Investors are suggested to take a breather until the holiday ends."
China's new home prices fell for the third consecutive month in December, according to the National Bureau of Statistics. Average new home prices fell 0.3 percent from November across the country. Fifty-two cities out of 70 being monitored posted lower prices.
"Commercial housing sales and new housing construction will continue to fall in 2012 as the government sticks with property controls," said Wang Tao, chief economist at UBS Securities.
Developers fell 1.52 percent. China Vanke Co, the nation's largest developer dropped 0.92 percent to 7.51 yuan. Poly Real Estate Group lost 2.22 percent to 10.12 yuan. China Merchants Property Development slumped 3.53 percent to 17.78 yuan.
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