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Local stocks clouded by soft data

2012-09-21 08:53 Global Times     Web Editor: qindexing comment

Stock markets in Shanghai and Shenzhen were pummeled Thursday after a host of weak data indicated little improvement in the country's economy.

The Shanghai Composite Index declined 42.99 points, or 2.08 percent, to close at 2,024.84, a 43-month low. Meanwhile, the Shenzhen Component Index slumped 2.72 percent, or 229.54 points, to finish at 8,202.20.

Both markets opened lower Thursday and retreated until the markets closed, accompanied by a drop in trading sentiment. Most of the markets' heavily weighted sectors - including real estate, petrochemicals, automobiles and steel - took heavy losses during the day, with shipping stocks forming a notable exception.

HSBC released its preliminary China manufacturing purchasing managers' index (PMI) for September Thursday. The index carried a headline reading of 47.8, up marginally from 47.6 in August but still below the 50 mark, indicating the critical domestic manufacturing sector was contracting.

The Ministry of Commerce announced late Wednesday that foreign direct investment (FDI) in China had dropped 1.43 percent in August from the same month last year, marking the third consecutive month of decline as an uncertain global economy led overseas investors to curb their expansion plans, according to analysts.

The gloomy macro economic picture painted by these figures weighted heavily on mainland oil stocks Thursday. Sinopec Shandong Taishan Petroleum Co went down 6.63 percent to 5.21 yuan ($0.82).

Chinese property developers also had the distinction of being among the day's worst performers. China Merchants Property Development Co dived 3.65 percent to 18.48 yuan.

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