Joined Nov 11, 2007
31,929 Blog Posts

China Stocks Melt Down the Most in Two Weeks

Chinese stocks dropped the most in two weeks as indexes tracking energy, materials and industrial companies sank to the lowest levels since November 2008.

China Shenhua Energy Co., the nation’s biggest coal producer, slipped 3.6 percent, taking its loss this year to 38 percent. Yunnan Tin Co. plunged 8.7 percent after saying its chairman is under investigation. Zijin Mining Group Co. (601899), China’s largest gold producer, declined for the first time in six days after saying first-half profit probably decreased. Goldman Sachs Group Inc. cut its earnings forecasts for Chinese mining companies, citing lower metal prices and sales.

The Shanghai Composite Index (SHCOMP) fell 2.4 percent to 1,958.27 at the close, after climbing 1.4 percent last week. The CSI 300 Index slid 2.8 percent to 2,163.62. The Hang Seng China Enterprises Index (HSCEI) retreated 1.1 percent in Hong Kong. The ChiNext index of smaller companies lost 2.5 percent.

“There’s a lack of confidence in the economy,” said Li Jun, a strategist at Central China Securities Co. in Shanghai. “There’s also concern about possible capital outflows. There’s nothing positive for stocks.”

U.S. employers added more workers than economists expected in June, data July 5 showed, stoking expectations the Fed will be able to taper asset purchases that prompted capital flows into emerging markets.

China’s State Council, headed by Premier Li Keqiang, pledged last week to improve the effectiveness of financial support for the economy after a cash crunch. Misallocation of capital is hampering the restructuring of the economy and the financial sector must play a better role in helping the overhaul, the cabinet said July 5 after equity markets closed. The State Council said it will maintain its “prudent” monetary-policy stance while ensuring a reasonable supply of money and credit.

Inflation Data…”

Full article

If you enjoy the content at iBankCoin, please follow us on Twitter