Shanghai Index in 2-day Decline of 3.6%

Chandrasekhar Atreya
28 Dec, 2010
New York City

Shanghai key indexes dropped 1.7% after losing nearly 2% yesterday. Profits at industrial companies moderated in the first eleven months to November. Guizhou Province signs 47 contracts with state-run firms for 300 billion yuan.

[R]5:00 PM Hong Kong, China – Shanghai key indexes dropped 1.7% after losing nearly 2% yesterday. Profits at industrial companies moderated in the first eleven months to November. Guizhou Province signs 47 contracts with state-run firms for 300 billion yuan.[/R]

Market indexes in Shanghai fell for the second day in a row. The decline of 1.7% today rounded up 3.6% fall in two days after China lifted rates on Saturday. Lack of year end liquidity also contributed to the market decline.

The Shanghai Composite Index dropped 1.74% or 48.41 to close at 2,732.99 and the CSI 300 Index fell 1.77% or 54.78 to close at 3,044.93.

The Hang Seng Index declined 0.93% or 212.07 to close at 22,621.73 and the markets reopened after Monday closure.

Profits at industrial companies in China continued to moderate in November on rising input costs and uncertainties caused by restructuring in the manufacturing sector.

Net income at China’s industrial firms surged 49.4% from a year earlier to 3.88 trillion yuan in the first 11 months to November, slower than the pace of 51.6% through October, the National Bureau of Statistics said on Monday.

China plans to strengthen its position as a large trading nation in the next decade to shift the focus of its economic growth to domestic consumption rather than exports, Vice Commerce Minister Zhong Shan said at a forum organized by the Development Research Center under the State Council, China’s Cabinet, according to a statement published on the Web site of the ministry on Monday.

“China will keep its growth in trade stable, and it must be higher than the global average to secure its position in the world and it must be higher than the country’s GDP expansion to be able to fuel a healthy economic development,” Zhong said at the forum.

Baoshan Iron and Steel Co delivered its first batch of steam generator tubes to a unit of Dongfang Electric Corp, China’s leading power equipment maker. China is the fourth country in the world capable of producing key component used in nuclear power plants.

Two senior executives at Zijin Mining Group Co were fined for an acidic waste spill in July, the government of Fujian Province said on Monday.

Under the law, people who are directly responsible for a major water pollution accident should be fined no more than 50% of their income in the previous year. President Chen Jinghe was fined 705,997 yuan and Vice Executive President Zou Laichang was fined 449,768 yuan.

China’s resource-rich Guizhou Province signed 47 contracts worth nearly 300 billion yuan with state-owned companies as the government aims to spur economic growth in the inland province.

Several companies, including Sinopec Group, Aluminum Corp of China and China Railway Group, signed 47 contracts and plan to invest a total of 292.9 billion yuan in mining, power and tourism industries in the southwestern province.

PetroChina Co agreed to sell 60% stake in PetroChina Beijing Natural Gas Pipeline Co to Kunlun Energy Co for 18.9 billion yuan.

Stock Movers

China Vanke Co Ltd slumped 4.79% while China Construction Bank, China’s largest mortgage lender, dropped 1.7%.

Jiangxi Copper Co fell 1.44% to 41.20 yuan and Yunnan Tin Co sank 1.46% to 29.41 yuan.

Yanzhou Coal Mining Co lost 3.06% to 27.25 yuan and Xishan Coal & Electricity Power Group Co dropped 2.23% to 25.90 yuan.