China stocks sag down after lunar holidays as retailers decline
February 7, 2014 9:14 am
China’s stocks decline as mainland markets resumed trading after a week-long holiday. Financial and consumer firms led pullbacks as manufacturing and services data indicated a slowdown and retail sales growth decelerated.
Suning Commerce Group Co., the biggest electronics retailer, relinquished 2.2 percent, dragging down a gauge of consumer companies reliant on economic growth. Ping An Insurance (Group) Co. gave up 2.5 percent, tracking retreats for the Hong Kong-traded shares of the nation’s second-largest insurer during the Chinese Lunar new year holidays.
The Shanghai Composite Index surrendered 0.3 percent to 2,027.38 at 10:29 a.m., the weakest performing mark since January 21. During the holiday, emerging equities backslide for their lowest opening to a year, while Hong Kong’s benchmark index slumped to a six-month low.
“China’s stocks are digesting the bad news from global markets during the break,” said Zhang Gang, a strategist at Central China Securities in Shanghai. “The market will still remain weak in the near term.”
China’s official Purchasing Managers’ Index moved lower to a six-month low of 50.5 in January as output and orders slowed, data released February 1 showed. The non-manufacturing PMI declined to 53.4, the worst since at least March 2011, according to an official report on February 4. HSBC Holdings Plc and Markit Economics’ services Purchasing Managers’ Index declined to 50.7 percent, the weakest performing mark since August 2011, a report today showed. Numbers above 50 signal expansion.
Holiday Sales
Suning Commerce dropped 2.2 percent to 10.15 yuan. Midea Group Co. retreated 2.5 percent to 45.68 yuan.
China’s retail and catering sales rose to 610.7 billion yuan during the seven-day Lunar holidays, 13.3 percent higher than during the same holiday last year, the official Xinhua News Agency reported yesterday, citing the Ministry of Commerce. That compares with 14.7 percent growth last year and 16.2 percent in 2012, according to previously released figures.
Ping An Insurance lost 2.5 percent to 38.15 yuan. The Hong Kong-traded shares slid 3.8 percent during the holiday break through yesterday. Citic Securities Co., the nation’s biggest-listed brokerage, fell 1.3 percent to 11.43 yuan. Its Hong Kong shares slumped 3.4 percent during the holiday.
Trading volumes in the Shanghai gauge were 4.3 percent above the 30-day average for this time of day, according to data compiled by Bloomberg. The index lost 3.9 percent in January, capping the biggest January drop in four years.
Overseas Sank
The Bloomberg China-US Equity Index slumped 2 percent since the break through yesterday, while the Hang Seng Index dropped 2.8 percent. The overseas retreat left shares in China’s $3.4 trillion market valued at a 1.1 percent premium versus their Hong Kong-listed counterparts, after touching the widest gap in four months on Feb. 5, according to the Hang Seng China AH Premium Index.
The MSCI Emerging Markets Index tumbled 8.5 percent this year through Feb. 4, the worst retreat for that period since at least 1988, according to data compiled by Bloomberg. The Hang Seng gauge of Hong Kong companies sank 11 percent from its Dec. 2 high. The Hang Seng China Enterprises Index (HSCEI) of mainland companies listed in the city lost 18 percent during that time.
Bill Gross, who oversees the world’s biggest bond fund at Pacific Investment Management Co., said the slowdown in China is among the biggest concerns for emerging-market investors.
Mystery Meat
“I call China the mystery meat of emerging-market countries,” Gross said in a Feb. 4 interview on Bloomberg Television. “Nobody knows what’s there and there’s a little bit of bologna, so we’re just going to have to wonder going forward through this year as to the potential problems in China and other emerging markets.”
Short-term losses may create buying opportunities for China Securities Co.’s Zhang Limin. He said he placed red dollar notes under his quilt during the New Year holidays for good luck as part of his hometown tradition.
“I put a lot, a lot of red notes under the blanket,” Zhang, an investment adviser, said by phone from the northeastern city of Harbin. “I turn ecstatic when I see market volatility. As long as there are big movements, there are opportunities.”
The Shanghai Composite, comprised of mainland-listed shares restricted to local investors and qualified foreign institutions, is valued at 10.2 times reported earnings, down from 29 times in 2009.
‘In Flames’
President Xi Jinping has signaled his willingness to sacrifice short-term growth to reduce the economy’s reliance on debt-fueled infrastructure spending and tackle pollution.
China’s gross domestic product grew 7.7 percent in 2013, the same rate as in 2012. Economists forecast an expansion of 7.4 percent this year, the weakest pace since 1990, based on the median estimate in a Bloomberg News survey. Credit Suisse Group AG cut its first-quarter growth forecast last week, citing anecdotal evidence of “surprisingly slow” retail sales before the new year holiday.
Everbright Securities Co.’s Zeng Xianzhao, an analyst in Chongqing, said he’s bracing for more losses.
“I don’t rule out the possibility that the Shanghai index may hit a new low,” Zeng said. “The market is half in the sea and half in flames.”
The material has been provided by InstaForex Company – www.instaforex.com
China’s stocks decline as mainland markets resumed trading after a week-long holiday. Financial and consumer firms led pullbacks as manufacturing and services data indicated a slowdown and retail sales growth decelerated.
Suning Commerce Group Co., the biggest electronics retailer, relinquished 2.2 percent, dragging down a gauge of consumer companies reliant on economic growth. Ping An Insurance (Group) Co. gave up 2.5 percent, tracking retreats for the Hong Kong-traded shares of the nation’s second-largest insurer during the Chinese Lunar new year holidays.
The Shanghai Composite Index surrendered 0.3 percent to 2,027.38 at 10:29 a.m., the weakest performing mark since January 21. During the holiday, emerging equities backslide for their lowest opening to a year, while Hong Kong’s benchmark index slumped to a six-month low.
“China’s stocks are digesting the bad news from global markets during the break,” said Zhang Gang, a strategist at Central China Securities in Shanghai. “The market will still remain weak in the near term.”
China’s official Purchasing Managers’ Index moved lower to a six-month low of 50.5 in January as output and orders slowed, data released February 1 showed. The non-manufacturing PMI declined to 53.4, the worst since at least March 2011, according to an official report on February 4. HSBC Holdings Plc and Markit Economics’ services Purchasing Managers’ Index declined to 50.7 percent, the weakest performing mark since August 2011, a report today showed. Numbers above 50 signal expansion.
Holiday Sales
Suning Commerce dropped 2.2 percent to 10.15 yuan. Midea Group Co. retreated 2.5 percent to 45.68 yuan.
China’s retail and catering sales rose to 610.7 billion yuan during the seven-day Lunar holidays, 13.3 percent higher than during the same holiday last year, the official Xinhua News Agency reported yesterday, citing the Ministry of Commerce. That compares with 14.7 percent growth last year and 16.2 percent in 2012, according to previously released figures.
Ping An Insurance lost 2.5 percent to 38.15 yuan. The Hong Kong-traded shares slid 3.8 percent during the holiday break through yesterday. Citic Securities Co., the nation’s biggest-listed brokerage, fell 1.3 percent to 11.43 yuan. Its Hong Kong shares slumped 3.4 percent during the holiday.
Trading volumes in the Shanghai gauge were 4.3 percent above the 30-day average for this time of day, according to data compiled by Bloomberg. The index lost 3.9 percent in January, capping the biggest January drop in four years.
Overseas Sank
The Bloomberg China-US Equity Index slumped 2 percent since the break through yesterday, while the Hang Seng Index dropped 2.8 percent. The overseas retreat left shares in China’s $3.4 trillion market valued at a 1.1 percent premium versus their Hong Kong-listed counterparts, after touching the widest gap in four months on Feb. 5, according to the Hang Seng China AH Premium Index.
The MSCI Emerging Markets Index tumbled 8.5 percent this year through Feb. 4, the worst retreat for that period since at least 1988, according to data compiled by Bloomberg. The Hang Seng gauge of Hong Kong companies sank 11 percent from its Dec. 2 high. The Hang Seng China Enterprises Index (HSCEI) of mainland companies listed in the city lost 18 percent during that time.
Bill Gross, who oversees the world’s biggest bond fund at Pacific Investment Management Co., said the slowdown in China is among the biggest concerns for emerging-market investors.
Mystery Meat
“I call China the mystery meat of emerging-market countries,” Gross said in a Feb. 4 interview on Bloomberg Television. “Nobody knows what’s there and there’s a little bit of bologna, so we’re just going to have to wonder going forward through this year as to the potential problems in China and other emerging markets.”
Short-term losses may create buying opportunities for China Securities Co.’s Zhang Limin. He said he placed red dollar notes under his quilt during the New Year holidays for good luck as part of his hometown tradition.
“I put a lot, a lot of red notes under the blanket,” Zhang, an investment adviser, said by phone from the northeastern city of Harbin. “I turn ecstatic when I see market volatility. As long as there are big movements, there are opportunities.”
The Shanghai Composite, comprised of mainland-listed shares restricted to local investors and qualified foreign institutions, is valued at 10.2 times reported earnings, down from 29 times in 2009.
‘In Flames’
President Xi Jinping has signaled his willingness to sacrifice short-term growth to reduce the economy’s reliance on debt-fueled infrastructure spending and tackle pollution.
China’s gross domestic product grew 7.7 percent in 2013, the same rate as in 2012. Economists forecast an expansion of 7.4 percent this year, the weakest pace since 1990, based on the median estimate in a Bloomberg News survey. Credit Suisse Group AG cut its first-quarter growth forecast last week, citing anecdotal evidence of “surprisingly slow” retail sales before the new year holiday.
Everbright Securities Co.’s Zeng Xianzhao, an analyst in Chongqing, said he’s bracing for more losses.
“I don’t rule out the possibility that the Shanghai index may hit a new low,” Zeng said. “The market is half in the sea and half in flames.”
The material has been provided by InstaForex Company – www.instaforex.com
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