China’s stock benchmarks decline for the third day as investors shrug aside rising industrial profits for the next growth driver
- The main stock indexes of Shanghai and Shenzhen fell for the third consecutive day
- Hong Kong’s Hang Seng Index rose by less than 1 per cent
The stock indexes of Shanghai and Shenzhen declined for a third day on Monday, as investors sold their holdings ahead of the end of the first-quarter corporate earnings season, even after better-than-expected economic data.
The Shanghai Composite Index closed 0.8 per cent lower at 3,062.50, while the benchmark gauge on the Shenzhen exchange fell 2.4 per cent to 1,625.62. The Nasdaq-style ChiNext Index declined 2.6 per cent. Turnover shrank to 646 billion yuan (US$96 billion), easing back from more than 1 trillion yuan everyday at the beginning of April. As many as 336 stocks fell by their 10 per cent daily limit on the two exchanges.
The yuan-denominated A share market is trying to find a growth driver to lead its advance, after the Shanghai index led the world this year as the best-performing global benchmark, with its 23.8 per cent surge, said Emperor Securities’ research director Stanley Chan.
“There are a lot more selling pressure in the A shares than other markets, because [the Chinese market] ran up so much this year,” Chan said.
Investors shrugged aside China’s improving industrial profits, which jumped 13.9 per cent in March from a year ago, the biggest annual increase since July 2018. The reading is the latest sign that China’s slowing economy may have found a bottom and may be recovering, analysts said. However, it could also presage a tighter monetary policy and a halt to any further fiscal stimulus, they said.
The shares of brokerages led declines, as investors were concerned that shrinking trading volume would crimp fees and hurt their earnings. A gauge that tracks the performance of 39 lister brokerages fell 5.4 per cent, with four of them plunging by their 10 per cent daily limit, according to Shanghai Wind.