China shares slump to three-year low
Mon July 16, 2012 8:01pm
CHINESE shares have fallen to a new three-year low, dropping 1.74 per cent on concerns slowing economic growth could see company profits fall, dealers say.
The Shanghai Composite Index slumped 37.94 points on Monday to 2,147.96 on turnover of 62.7 billion yuan ($A9.60 billion), its lowest close since March 2009.
In Hong Kong, the Hang Seng index closed slightly higher, rising 0.15 per cent, or 28.71 points, to 19,121.34 on turnover of HK$35.2 billion ($A4.45 billion).
China said on Friday its economy grew 7.6 per cent year-on-year in the second quarter, its slowest rate for more than three years.
"Sentiment is severely battered by a string of negative news," Zhang Gang, an analyst at Central China Securities, told Dow Jones Newswires, citing earnings warnings from some blue chip firms.
Sinopec Shanghai slumped 4.99 per cent to 5.71 yuan while Sinopec Yizheng dropped 4.93 per cent to 6.75 yuan after the two companies warned investors of potential losses for the first half due to oil price volatility.
A lack of detail from Beijing on measures to stabilise the domestic economy had also dampened hopes for aggressive policy easing, Zhang added.
In Hong Kong, trading resumed in real estate giant Sun Hung Kai Properties after its co-chairmen were formally charged on Friday in a high-profile bribery investigation.
The shares closed down 0.94 per cent to $HK94.55, suggesting the news had been largely expected, and Credit Suisse said it was now on a "cheap valuation" at 43 per cent of net assets and "should start to outperform from here".
ICBC was down 0.5 per cent to $HK4.00 but China Mobile was up 0.29 per cent to $HK85.70.