Monday 20 November 2017

China stocks slump on slowdown concerns

A Chinese investor monitors stock prices at a brokerage house in Beijing (AP)
A Chinese investor monitors stock prices at a brokerage house in Beijing (AP)

Bloomberg and AFP

China’s stocks slumped, dragging the benchmark index down the most in three weeks, after soft data over the weekend added to concern that the economic slowdown is deepening.

The Shanghai Composite Index slid 2.7pc to 3,114.58, led by technology and consumer companies. About 12 stocks fell for each that rose on the gauge, while volumes were 21pc below the 30-day average.

The Hang Seng China Enterprises Index was littlechanged, reversing a 1.4pc advance.

August economic data released Sunday showed a challenging picture for policy makers, adding to weaker-than-expected numbers last weak suggesting China's growth is slowing down.

Industrial output missed economists’ forecasts, rising 6.1pc in August from a year earlier, compared with the 6.5pc growth expected by the markets.

Meanwhile, investment in the first eight months increased at the slowest pace since 2000.

A gauge of manufacturing this month showed the sector contracting in August, while inflation in consumer prices rose but those at the factory gate fell at their fastest pace in six years owing to slowing overseas demand and a slack property market.

While the data is soft, analysts said it could lead to further monetary easing measures by authorities following five interest rate cuts since November.

The government also announced details about plans to make state-owned enterprises more efficient, including encouraging private investment.

Beijing intends to overhaul its vast state-owned firms in a bid to give a boost to the country's economy. It will seek to channel more private investment into the publicly-owned enterprises, which dominate the $10 trillion economy.

The plan aims to reform “zombie enterprises,” while encouraging a “blending” between state and private capital, government agencies overseeing the plan said in statements Monday.

Meanwhile, the Hang Seng Index added 0.2pc. The CSI 300 Index dropped 2.7pc and investors pulled a net $1.7bn from equities on mainland and Hong Kong bourses during the week to September 9, a ninth straight week of outflows, according to China International Capital Corp.

Telegraph.co.uk

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