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English>>China Business

Murky economic outlook weighs on markets

By Yu Xi  (Global Times)

09:16, August 16, 2012

Stock markets in Shanghai and Shenzhen declined Wednesday as the uncertain prospects facing the domestic economy once again spooked investors.

The Shanghai Composite Index fell 23.58 points, or 1.10 percent, to close at 2,118.95; while the Shenzhen Component Index slumped 0.45 percent, or 41.01 points, to finish at 9,048.61.

Both benchmarks opened lower Wednesday and drifted down throughout most of the morning session. A sharp drop in the heavily weighted coal, non-ferrous metal, securities, electric power and real estate sectors weighed on both indices in the afternoon session. Despite late gains in aviation manufacturing and commercial chain stocks, which propelled the Shenzhen Component for a brief period into positive territory, both benchmarks ended with losses on the day.

The communication, agriculture, forestry, animal husbandry, fishery and non-ferrous metal sectors were among Wednesday's biggest losers.

Fears that deteriorating economic conditions in the European Union might tighten the screws on China's export-oriented industries and drag down the domestic economy in the process were cited by analysts as a major factor behind Wednesday's tumble.

Shares of Shenzhen-listed Suning Appliance Co went on a roller coaster ride Wednesday after a discount pricing war erupted between it and its major rivals: Hong Kong-listed Gome Electrical Appliances Holding Ltd and unlisted Suning dipped over 3 percent to 5.68 yuan ($0.89) during the morning trading session, but rebounded hugely after the company announced in the early afternoon that its major stakeholders have plans to increase their position in the company with 1 billion yuan in capital in the coming three months.

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