Home / Business / Money / Shanghai Composite sinks as financial, property stocks slip

Shanghai Composite sinks as financial, property stocks slip

Shanghai Composite sinks as financial, property stocks slip

Chinese shares tumbled on Monday due to sharp declines in the financial and property sectors, while a positive handover from Wall Street underpinned gains in the rest of Asia.

The sell-off came a day before the release of China’s fourth quarter gross domestic product (GDP) on Tuesday. The report is expected to show the economy grew 7.2 percent on year, according to a Reuters poll, down from 7.3 percent in the third quarter.

“China’s central government has been showing signs it is willing to let the economy slow to mitigate the hard landing fears and reduce debt burdens in the economy.. Its willingness to let the economy slide would suggest Chinese growth is heading towards the lower end of 7 percent rather than a high-7 to low-8 percent level,” said Evan Lucas, market strategist at IG in a note.

Meanwhile, US stocks closed higher for the first session in six last week, with all three major indices closing over 1 percent higher on the back of rising crude oil prices and strong consumer price data. Wall Street is closed on Monday, but the State of the Union speech by President Barack Obama on Tuesday will be closely watched.

Global markets are also awaiting the European Central Bank’s (ECB) policy decision on Thursday, when it is widely expected to announce a government bond buying plan to stimulate the euro zone.

Shanghai 4 percent lower

Mainland shares fell as much as 6 percent in the morning session after posting a 3 percent weekly gain for the week that ended Friday.

Data released over the weekend showing that new home prices fell 4.3 percent in December from a year ago weighed on developers, sending Vanke, Gemdale and China Merchants Property tumbling 6 percent each.

Citic Securities and Everbright Securities plunged by the maximum daily trading limit of 10 percent after regulators announced measures to crack down on margin trading late on Friday,

Nikkei up 0.5 percent

Japan’s benchmark index pared gains after breaching the 17,000 level earlier in the session. Still, the index recovered after closing down more than 1 percent in the previous session and ending the week with its third straight weekly loss.

Among the biggest gainers on the Nikkei, Sony and Nintendo climbed more than 2 percent each.

Sharp skidded over 5 percent after the Nikkei daily reported that it could reveal a net loss to the tune of “billions of yen” this financial year.

ASX 1 percent higher

Australia’s benchmark S&P ASX 200 halted a five-day losing streak and moved off a four-week low of 5,299 points hit on Friday. Data showing a private gauge of inflation fell to two-and-a-half-year low in December helped to underpin gains as it sparked hopes for an interest rate cut.

Copper miners outperformed, with Sandfire Resources and Oz Minerals surging more than 8 percent each as prices of the metal continued their climb.

Macquarie rallied more than 5 percent after forecasting a 10-20 percent rise in full-year profit.

Kospi gains 1 percent

South Korean shares bounced back from Friday’s 1 percent loss, boosted by a rally amid ship-builders. Hyundai Heavy, Daewoo Shipbuilding and Samsung Heavy Industries rallied over 2 percent each.


Check Also

Rupee recovers 6 paise to 67.01

The rupee today recovered some lost ground by rising 6 paise to ...

Notes ban to have positive impact on economy

NEW DELHI: The government’s demonetisation move has led to widespread adoption of ...