Markets

Mainland benchmark at 15-mth low Monday

By Chua Kong Ho (China Daily)
Updated: 2010-07-06 09:48

SHANGHAI: Mainland stocks declined, driving the benchmark index to a 15-month low, on concern a slowdown in the world's third-largest economy and fundraising by banks will dent profits and hurt existing shareholders' stakes.

The Shanghai Composite Index retreated 18.95, or 0.8 percent, to 2363.95 at the close, the lowest close since April 8, 2009. The gauge fell 6.7 percent last week, the most since February 2009, after manufacturing growth slowed more than economists forecast in June and the Conference Board lowered its April gauge for China's economic outlook. The CSI 300 Index slid 0.9 percent to 2512.65 on Monday.

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A Chinese services industry index compiled by HSBC Holdings Plc and Markit Economics fell to a 15-month low in June, according to a statement on Monday. Power demand growth will continue to slow "significantly" in July and August after easing "sharply" last month due to lower demand from heavy industries, the Shanghai Securities News reported on Monday, citing energy authorities it didn't name.

SAIC Motor, China's largest carmaker, lost 0.7 percent to 12.31 yuan ($1.82), extending a 39 percent decline this year. Sales of cars, sport-utility vehicles and multipurpose vehicles to consumers rose 10.9 percent from a year earlier, the China Automotive Technology & Research Center said on Monday. That compares with 34 percent growth in April and 25 percent in May, according to the center. Sales growth slowed as the government tightened credit to control inflation and cool the economy.

The Baltic Dry Index, a measure of commodity-shipping costs, dropped 3 percent to 2,280 points on July 2. The gauge has declined for 26 straight trading sessions and is down 27 percent this year.

Declines in Chinese stocks may signal the nation's economic growth is slowing, said Mark Mobius, who oversees about $34 billion in emerging markets as executive chairman of Templeton Asset Management Ltd in Singapore.

The Chinese economy may grow 10 percent "going forward", though the pace may fall to 9 percent, he told reporters in Paris July 2. Mobius said he's still buying stocks in China.

China will maintain policy continuity and flexibility to ensure "steady and relatively fast" growth and to balance growth, management of inflation expectations and economic restructuring, Premier Wen Jiabao said on July 3 after a visit to Hunan province.

Policymakers face increasing "dilemmas" as the effects of the global financial crisis become more severe than expected and worldwide recovery increasingly "zigzags", Wen was quoted as saying in a statement on the government's website on Sunday.

Hang Seng declines

Hong Kong stocks fell for a fourth day, completing the benchmark index's longest losing streak in two months, on concern over an economic slowdown and as lenders slid after Bank of China Ltd announced plans for a rights offer.

The Hang Seng Index retreated 0.3 percent to close at 19842.20, extending its drop in the past four days to 4.3 percent. More than two stocks fell among the Hang Seng Composite Index's 307 constituents for each that rose.

The Hang Seng China Enterprises Index slipped 0.6 percent to 11184.33.