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Weak service sector data drags stocks down
By Ye Zhen |
September 5, 2012, Wednesday
|
Online Edition
Online Edition
SHANGHAI stocks ended lower today after data showed China's service sector expanded at the slowest pace in one year in August.
The Shanghai Composite Index lost 0.29 percent, or 5.97 points, to close at 2037.68 points, the lowest in 43 months. Turnover was 44.9 billion yuan (US$7.1 billion) at the trading close.
HSBC China Service Purchasing Managers Index, a gauge of non-manufacturing activities in the private and export-oriented sectors, fell to 52.0 last month, down from 53.1 in July, Markit Economics said today.
A reading above 50 indicates business expansion.
"Service PMI for August fell to the lowest in one year due to slower new order intakes," said Qu Hongbin, chief economist for China at HSBC. "Coupled with a 9-month low of new orders in the manufacturing sector, it hints that the main risk confronting China's economy is still to the downside."
Shanxi Lu'an Environmental Energy Development Ltd led the decline among energy stocks, falling 3.9 percent to 16.08 yuan. China Shenhua Energy, the nation's biggest coal producer, shed 1.9 percent to 21.04 yuan. Yang Quan Coal Industry (Group) Co slumped 3 percent to 13.41 yuan.
Shanghai Lonyer Fuels Co, a marine fuel supplier which was listed on the Shanghai Stock Exchange last month, lost 2.7 percent to 12.92 yuan. China Petroleum and Chemical Co, China's largest oil refiner, lost 1 percent to 6.05 yuan. PetroChina Co, the second biggest player, shed 0.1 percent to 8.77 yuan.
Lenders traded lower as pessimism over profit outlook grew. China Minsheng Banking Corp fell 3.7 percent to 5.47 yuan. China Merchants Bank slid 1.3 percent to 9.71 yuan. Shanghai Pudong Development Bank Co fell 1.9 percent to 7.32 yuan.
The banking sector looked dreary due to interest rate cuts and the process of interest rate liberalization. A rebound in bank stock prices will be limited, said UBS Securities.
The Shanghai Composite Index lost 0.29 percent, or 5.97 points, to close at 2037.68 points, the lowest in 43 months. Turnover was 44.9 billion yuan (US$7.1 billion) at the trading close.
HSBC China Service Purchasing Managers Index, a gauge of non-manufacturing activities in the private and export-oriented sectors, fell to 52.0 last month, down from 53.1 in July, Markit Economics said today.
A reading above 50 indicates business expansion.
"Service PMI for August fell to the lowest in one year due to slower new order intakes," said Qu Hongbin, chief economist for China at HSBC. "Coupled with a 9-month low of new orders in the manufacturing sector, it hints that the main risk confronting China's economy is still to the downside."
Shanxi Lu'an Environmental Energy Development Ltd led the decline among energy stocks, falling 3.9 percent to 16.08 yuan. China Shenhua Energy, the nation's biggest coal producer, shed 1.9 percent to 21.04 yuan. Yang Quan Coal Industry (Group) Co slumped 3 percent to 13.41 yuan.
Shanghai Lonyer Fuels Co, a marine fuel supplier which was listed on the Shanghai Stock Exchange last month, lost 2.7 percent to 12.92 yuan. China Petroleum and Chemical Co, China's largest oil refiner, lost 1 percent to 6.05 yuan. PetroChina Co, the second biggest player, shed 0.1 percent to 8.77 yuan.
Lenders traded lower as pessimism over profit outlook grew. China Minsheng Banking Corp fell 3.7 percent to 5.47 yuan. China Merchants Bank slid 1.3 percent to 9.71 yuan. Shanghai Pudong Development Bank Co fell 1.9 percent to 7.32 yuan.
The banking sector looked dreary due to interest rate cuts and the process of interest rate liberalization. A rebound in bank stock prices will be limited, said UBS Securities.
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