Shanghai Plunges 5%, HK Stocks Down 1.4%

123jump.com Staff
09 Apr, 2008
New York City

China reported a decline in consumer confidence in the first quarter on rising food and energy prices. However, real estate sales continue to surge in March after falling for two months in a row. Stocks in Shanghai plunged 5% as investors worried that earnings in the first quarter will be lower than expected. Hang Seng index fell 1.4% but recovered from larger losses on rising energy and commodities stocks.

[R]6:00AM New York, 6:00 PM Hong Kong - China’s first quarter consumer confidence drops and stocks in Shanghai decline.[/R]

Hong Kong stock averages slipped on heightened worries on the general health of the global economy and rising oil prices that affected oil refiners. Gains in commodity stocks however helped trim losses.

Market sentiment

In Hong Kong trading Hang Seng Index fell 1.35% or 327.12 to 23,984.57,and the China Enterprises Index of Hong Kong-listed mainland companies, or H shares, slumped 2.52% or 332.42 to 12,863.80.

In Shanghai trading the CSI 300 Index plunged 5.52% or 202.93 to 3,688.12.

China’s first quarter consumer confidence falls

China’s National Bureau of Statistics reported today that the consumer confidence index fell 1.7% from the previous quarter to 94.8.

The consumer confidence index release followed the disclosure of a slightly higher entrepreneurial confidence index and a lower business climate index for the first quarter.

While the entrepreneurial index rose 1 in the first quarter from the previous quarter to 140.6, the business climate index fell 7.4 to 136.2.

In February the consumer confidence hit an 18-month low of 94.3 following reports that the consumer price index had increased to a 12-year high of 8.7%, with food prices increasing by 23.3%.

Property prices increase in Shanghai

China Daily reported that China Real Estate Index System said today property sales rose 150% from February to 1.8 million square meters in March.

Average sales growth in March from February was around 90% during the past three years. Apartment sales grew 72.7% to 17,644 in March from February.

Economists believe that property sales are rising after falling 16% in first two months of this year.

Gainers & Losers

Commodity stocks rose on rising metal prices and on reports the gold price in Hong Kong went up HK$71 to HK$8,537 an ounce yesterday, or $ 920.86 per troy ounce.

Coal producers also gained after Asian steel makers agreed to increase the price they pay for the commodity.

China Coal rose 1.35% at HK$15.04 and China Shensua Energy advanced 0.6% at HK$34.85.

China Shensua also increased after Reuters news reported that the company plans to buy assets worth Rmb11 billion from its state parent.

Alibaba fell 7.5% to HK$15.50 after technology companies in the United States showed gloomy outlooks in the sector, stocking expectations that earnings will decline.

Sinopec Corp shed 4% after a fire at a key European refinery in Finland pushed oil prices near $109 per barrel, a development that compromises the company’s earnings as domestic petroleum products are pegged by the government.

China BlueChemical Ltd tumbled 5.4% after Norwegian fertilizer group Yara offered to sell a 1.75% stake in China''s top producer of nitrogen fertilizer.

China Railway Construction Corp Ltd slumped 4.8% after it revealed that it has issued 181.54 million H shares at an offer price of HK$10.70 to cover additional sales during the international offering at the time of public offering.