Arab Today, arab today equities slump amid slowgrowth estimates
Last Updated : GMT 08:03:52
Arab Today, arab today
Arab Today, arab today

Equities slump amid slow-growth estimates

Arab Today, arab today

Arab Today, arab today Equities slump amid slow-growth estimates

Beijing - XINHUA

Chinese shares dropped for an eighth consecutive day Thursday against a backdrop of unexpected economic weakness and concerns about possible capital flight, which have overshadowed Asian bourses for weeks. Investor sentiment was further depressed by word of a resumption in initial public offerings, which many believe could depress market liquidity and put pressure on share prices. The benchmark Shanghai Composite Index fell 2.83 percent, the biggest one-day fall since March 4, to 2,148.36 points, the year\'s low. The previous low was 2,174.12 on May 2. The Shenzhen index slipped 3.78 percent to 8,432.42. Lackluster statistics released ahead of the Dragon Boat Festival (Monday to Wednesday) holiday showed the economy is growing more slowly than expected, said Zhang Qi, an analyst from Haitong Securities Co Ltd. In May, industrial output expanded 9.2 percent year-on-year, down from April\'s 9.3 percent increase. Exports edged up 1 percent to 1.14 trillion yuan ($185.8 billion), well below market expectations of 7.3 percent growth, while imports contracted 0.3 percent to 1.01 trillion yuan, missing market expectations of 6 percent growth. The consumer price index, a main gauge of inflation, rose 2.1 percent year-on-year in May, slowing from 2.4 percent in April, and the producer price index, which measures inflation at the wholesale level, fell 2.9 percent year-on-year in May, both pointing to a sluggish end-user market. The World Bank has cut its economic growth forecast for China to 7.7 percent in 2013 from an earlier projection of 8.4 percent, suggesting Chinese policymakers are looking to rebalance the nation\'s growth model. The United States Federal Reserve Board is likely to gradually scale down and finally phase out the quantitative easing program as the US economy picks up, which means there will be much less \"hot money\" circulating in the stock market, said Wang Jianhui, chief economist with Southwest Securities Co Ltd. The likelihood of restarting IPOs after more than eight months has dealt a blow to a capital-thirsty market, said Wang. More than 660 companies are awaiting approval by the China Securities Regulatory Commission, he added. During the Dragon Boat holiday, most major stock markets in the Asia-Pacific region slumped, damping investors\' sentiment toward China\'s A-share market, said Zhang. The regional losses continued on Thursday, with Japan\'s Nikkei down 6.35 percent, the Hang Seng Index in Hong Kong down 2.19 percent and the Indian BSE Sensex 1.12 percent lower. \"Today is very unusual. But the stock market in our country is always unusual. When the stocks in other countries drop, it will drop in our country. When the stocks in other countries rise, it will still drop in our country. And it always falls a lot but rises a little,\" said Zhang Huiling, a 75-year-old retiree, who has invested in the stock market for more than 10 years. \"The slump of the broad market is overdone despite all the negative factors, but we should caution against a long-term downward trend,\" said Wang. Zuo Xiaolei, chief economist with China Galaxy Securities Co Ltd, suggested the index plunge may be led by speculation. \"I do not see (how) the macroeconomy should be blamed for today\'s index drop, and speculators are just making their profit-taking choices,\" said Zuo.

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