China Stocks Slump to 7-Week Low, Joining Global Equities Rout
By Bloomberg News - Aug 5, 2011
China’s stocks fell, capping the benchmark index’s worst week since May, as global equities markets plunged on concern slumping U.S. growth and Europe’s debt crisis will push the world economy into recession.
Jiangxi Copper Co. and Aluminum Corp. of China Ltd., the biggest producers of copper and aluminum, tumbled more than 3 percent after aluminum and zinc futures slid by the daily limit in Shanghai. Industrial & Commercial Bank of China (601398) Ltd. led declines by lenders on speculation the central bank will keep tightening monetary polices to tame inflation.
“China’s already-weak stock market can’t find shelter from the global rout,” said Tu Jun, a strategist at Shanghai Securities Co. “Negative factors like the European debt crisis and U.S. growth concerns have accumulated and kept adding to investors’ pessimism. That has hammered markets worldwide.’”
The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, slumped 57.6 points, or 2.2 percent, to 2,626.42 at the 3 p.m. close, the lowest since June 20. The CSI 300 Index (SHSZ300) declined 2.1 percent to 2,897.42.
The Shanghai gauge has fallen 2.8 percent this week on concern an agreement to raise America’s debt ceiling won’t be enough to avoid credit ratings downgrades. A report showing consumer spending dropping by the most in almost two years boosted speculation the world’s biggest economy may slip back into recession. China is scheduled to release economic data including the July inflation report on Aug. 9. The CPI probably stayed at a three-year high of 6.4 percent, according to the median estimate of 25 economists surveyed by Bloomberg.
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