China stocks see best week this month, HK down
Monday, 28 June 2010
SHANGHAI/HONG KONG, June 27 (Reuters): China's key stock index rounded off its best week for the month Friday despite falling for the day, with shares clinging on to gains made earlier in the week when China relaxed its grip over the yuan in a landmark move.
In Hong Kong, shares fell 0.21 per cent for a second straight session to its weakest close this week as exporters such as Foxconn fell on fears that weak consumer spending in the United States could hit earnings.
The benchmark Shanghai Composite Index slipped 0.54 per cent to 2,552.8 points, its third drop in a row. And in a sign that investors were mostly cautious, trade volumes were near their lowest in 17 months.
The index was up 1.6 per cent for the week, but turnover was at 51.5 billion yuan ($7.58 billion) compared with 50.8 billion yuan Thursday.
Analysts said selling was led by retail investors, with dwindling trade volumes suggesting the market was trying to stabilise and find a floor after hitting a one-year low late last month.
"The market has been performing poorly so it would take some time to rebuild confidence before buyers start coming back," said Cheng Yi, an analyst at Xiangcai Securities.
The data showed that modest losses in blue-chip stocks weighed the most on the index. Sinopec Corp slipped 0.2 per cent, CITIC Securities slid 3.1 per cent, and China Merchants Securities lost 1.5 per cent.
With the imminent mammoth initial public offering by Agricultural Bank of China threatening to further weigh on the market in coming days, some analysts said they did not expect a strong rebound in stock prices any time soon.
Indeed, a poll showed Shanghai shares would only rise slightly this year, as the euro zone debt crisis and steps by China's central bank to cool property prices hurt demand for shares. The stock index was seen at 2,700 by December.
China this week broke the yuan's peg to the dollar and vowed to allow the currency to move more flexibly, boosting demand for risky assets worldwide and raising hopes that it would help China pull more weight as a consumer in the long run.
The Shanghai share index has shed 22 per cent this year, the second worst-performer in the world after its Greek peer, as investors sold on worries the Chinese central bank may slow the economy too much by tightening monetary policy too far.
The benchmark Hang Seng Index fell 42.7 points to 20,690, while the China Enterprise Index of top locally listed mainland stocks was down 0.59 per cent to 11,865.17.
Market turnover was thin at HK$51.4 billion ($6.6 billion), higher than Thursday's HK$41.8 billion.
"Nobody has got any confidence right now, especially in the developed economies like Europe and the United States," said Francis Lun, general manager at Fulbright Securities. "Things in Europe look like they're going through the floor."
In Hong Kong, shares fell 0.21 per cent for a second straight session to its weakest close this week as exporters such as Foxconn fell on fears that weak consumer spending in the United States could hit earnings.
The benchmark Shanghai Composite Index slipped 0.54 per cent to 2,552.8 points, its third drop in a row. And in a sign that investors were mostly cautious, trade volumes were near their lowest in 17 months.
The index was up 1.6 per cent for the week, but turnover was at 51.5 billion yuan ($7.58 billion) compared with 50.8 billion yuan Thursday.
Analysts said selling was led by retail investors, with dwindling trade volumes suggesting the market was trying to stabilise and find a floor after hitting a one-year low late last month.
"The market has been performing poorly so it would take some time to rebuild confidence before buyers start coming back," said Cheng Yi, an analyst at Xiangcai Securities.
The data showed that modest losses in blue-chip stocks weighed the most on the index. Sinopec Corp slipped 0.2 per cent, CITIC Securities slid 3.1 per cent, and China Merchants Securities lost 1.5 per cent.
With the imminent mammoth initial public offering by Agricultural Bank of China threatening to further weigh on the market in coming days, some analysts said they did not expect a strong rebound in stock prices any time soon.
Indeed, a poll showed Shanghai shares would only rise slightly this year, as the euro zone debt crisis and steps by China's central bank to cool property prices hurt demand for shares. The stock index was seen at 2,700 by December.
China this week broke the yuan's peg to the dollar and vowed to allow the currency to move more flexibly, boosting demand for risky assets worldwide and raising hopes that it would help China pull more weight as a consumer in the long run.
The Shanghai share index has shed 22 per cent this year, the second worst-performer in the world after its Greek peer, as investors sold on worries the Chinese central bank may slow the economy too much by tightening monetary policy too far.
The benchmark Hang Seng Index fell 42.7 points to 20,690, while the China Enterprise Index of top locally listed mainland stocks was down 0.59 per cent to 11,865.17.
Market turnover was thin at HK$51.4 billion ($6.6 billion), higher than Thursday's HK$41.8 billion.
"Nobody has got any confidence right now, especially in the developed economies like Europe and the United States," said Francis Lun, general manager at Fulbright Securities. "Things in Europe look like they're going through the floor."