Latest News:  
Beijing   Sunny/Overcast    28 / 16 ℃  City Forecast

Home>>China Business

More consolidation expected in upcoming trading week

By Wang Jiamei  (Global Times)

08:21, May 28, 2012

China's languishing real economy may continue to keep the mainland stock markets in check, while the Shanghai exchange will likely see its tolerance of the 2,300-point mark put to the test this week, analysts said.

The Shanghai Composite Index ended trading at 2,333.55 points last week, down 0.47 percent week-on-week; while the Shenzhen Component Index closed at 9,893.77 points, down 0.18 percent compared with the previous week.

The mainland stock markets closed the first two days of trading on gains last week as a result of Premier Wen Jiabao's pledge to make maintaining steady economic growth a priority, but concerns over the worsening economy still sent both indices down in the following three days. In the end, the Shanghai Composite finished the week at its lowest level in six weeks Friday.

Although the government has announced various stimulus policies to boost consumption and infrastructure construction over the past weeks, thin trading volumes throughout the week showed that investor confidence failed to recover as economic data released so far this month mostly pointed to the deterioration of the domestic economy into the second quarter.

The latest key data, the preliminary HSBC China Manufacturing Purchasing Managers Index, fell to 48.7 in May, down from a final reading of 49.3 in April, marking the seventh straight month the index has indicated manufacturing contraction.

Meanwhile, China's big four State-owned banks - Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank and Bank of China - extended only 34 billion yuan ($5.36 billion) in new loans during the first 20 days of this month, which means the new bank loans in May will likely be lower compared with the previous month, according to a Securities Daily report.

If China's credit demand continues to show downward momentum, then the real economy won't bottom out in the short term, Gui Haoming, chief analyst at Shenyin & Wanguo Securities, said in a note.

As investors generally displayed cautiousness amid the slowing economic growth, the trading volume of both the Shanghai and Shenzhen markets shrank 5.51 percent week-on-week to 692.37 billion yuan last week. Meanwhile, around 11.96 billion yuan worth of capital fled the A-share market during the same period. Only the property, construction materials, engineering construction and insurance sectors received capital inflows; while brewing, food and medical companies recorded the most capital outflows.

In the coming week, worries about the cooling real economy may linger over the mainland stock markets, which are expected to consolidate further, analysts warned.


Leave your comment0 comments

  1. Name


Selections for you

  1. Chinese Navy survey vessel visits Indonesia

  2. Herchcovitch creations at Fashion Rio

  3. Stunning ways of bath

  4. Barca claim King's Cup

Most Popular


  1. Much-needed cooling awaits China
  2. Why is Washington so scared of Confucius?
  3. Chance to peacefuly resolve Iranian nuclear issue
  4. What is the US' aim behind arms sales to Taiwan?
  5. Investment-driven growth no longer a viable option
  6. Summit can't stop NATO from being marginalized
  7. Easing liquidity not a cure-all
  8. As Beijing remains mum, trade relationships suffer
  9. Intentions behind Japanese right-wingers’ collusion with ‘World Uyghur Congress’
  10. Real intentions of US exercise in Middle East

What's happening in China

Love for heroic teacher flows online

  1. Solar firms rally against US antidumping probe
  2. Confucius Institute to promote Chinese food
  3. Illegal Vietnamese workers found in Anhui
  4. Parents protest school policy in Beijing
  5. Home prices to dip, but tumble unlikely

China Features

  1. High ticket prices, unaffordable landscapes
  2. Huangyan tensions
  3. 2012 Russia-China joint naval exercise
  4. 2nd Beijing International Film Festival
  5. Auto China 2012

PD Online Data

  1. Spring Festival
  2. Chinese ethnic odyssey
  3. Yangge in Shaanxi
  4. Gaoqiao in Northern China
  5. The drum dance in Ansai