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Markets tumble, earnings concerns dent Moutai

By Louise Ho in Shanghai (Global Times)

16:53, January 28, 2013

Stock markets in Shanghai and Shenzhen retreated Friday with a significant decline in trading volume.

The Shanghai Composite Index ended last week at 2,291.30 after shedding 11.30 points, or 0.49 percent; while the Shenzhen Component Index dropped 86.95 points, or 0.92 percent, to finish at 9,357.13.

The Shanghai Composite and Shenzhen Component were down 1.11 percent and 0.80 percent week-on-week respectively by the close of trading Friday.

The markets opened lower Friday, dragged down by drops in the banking, securities, insurance and property sectors. Although gains from nonferrous metals stocks offered some support to the markets, it was not enough to keep both indices above even in a day characterized by thin trading.

Combined trading volume at the two exchanges totaled 154.2 billion yuan ($24.78 billion) Friday, down from Thursday's 254 billion yuan.

The nonferrous metals sector had the biggest gains Friday. Ningxia Orient Tantalum Industry Co surged over its 10-percent daily trading limit to 14.37 yuan.

Media and entertainment shares also notched respectable gains. Wasu Media Holding Co surged over the 10-percent daily limit to 17.90 yuan. Listed carmakers carried off respectable showings as well. Chongqing Changan Automobile Co rose 5.28 percent to 7.64 yuan.

The aviation sector encountered resistance Friday following rallies earlier in the week. Sichuan Chengfa Aero Science & Technology Co lost 9.05 percent to 12.56 yuan.

Liquor producers were also down Friday after sector heavy hitter Kweichow Moutai Co announced Friday that it would scale back its earnings growth forecast for 2012. The liquor conglomerate surrendered 3.53 percent to 189.05 yuan. Meanwhile, Jiugui Liquor Co, which was at the center of a plasticizing agent scandal in November, shed 5.16 percent to 29.21 yuan.

With two more trading weeks to go before the Spring Festival, experts say big dives before the holiday break are unlikely.

"After the rallies seen in recent weeks, the market will enter a quiet period and will not be so volatile for investors since there will be less news and policy action coming out before the holidays," said Sun Jianbo, chief strategy analyst at China Galaxy Securities, told China Business News Saturday.


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