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World Bank downgrade crushes A-shares

2013-06-14 08:03 Global Times Web Editor: qindexing
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Stock markets in Shanghai and Shenzhen flat-lined Thursday as most cornerstone sectors crumbled in the first day of trading after the Dragon Boat Festival holiday.

The Shanghai Composite Index lost 62.54 points, or 2.83 percent, to close at 2,148.36; while the Shenzhen Component Index fell 3.78 percent, or 331.18 points, to finish at 8,432.42.

Combined turnover at the two exchanges slipped to 163 billion yuan ($26.52 billion), down from last Friday's 172.4 billion yuan.

Both indices recorded most of their losses in early trading as a downgraded outlook on China's economy from the World Bank sent financial and real estate related stocks plummeting. The World Bank announced late Wednesday that it expects Chinese growth to come in at 7.7 percent for 2013 - sliding from its previous forecast of 8.4 percent - based on tepid demand for the country's exports in the US and Europe. These predictions come after May inflation figures from China's National Bureau of Statistics also pointed to cooling economic activity and weaker demand for locally made goods.

In what was an unmistakably abysmal day for A-shares, the aviation, nonferrous metal, automobile, coal and oil sectors also floundered.

In the property development sector, Poly Real Estate Group gave up 4.25 percent to 11.03 yuan, while China Vanke shed 4.82 percent to 10.67 yuan.

Cement producers took their share of lumps as well. Xinjiang West Construction Group dropped by the 10-percent daily limit to end at 11.25 yuan. Anhui Conch Cement Co surrendered 1.31 percent to 22.55 yuan.

With policymakers still mum on the subject of stimulus measures, analysts say that stocks could find further room to decline in the coming days.

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