CHINA: China stocks trim losses before close, while July inflation figures hit three-year high
Record ID:
1374243
CHINA: China stocks trim losses before close, while July inflation figures hit three-year high
- Title: CHINA: China stocks trim losses before close, while July inflation figures hit three-year high
- Date: 10th August 2011
- Summary: HONG KONG, CHINA (AUGUST 9, 2011) (REUTERS) HONG KONG SKYLINE HONG KONG STOCK EXCHANGE FLOOR HONG KONG STOCKS BOARD HONG KONG STOCK EXCHANGE WITH TICKER VARIOUS OF TRADERS GETTING PRINT OUTS STOCK EXCHANGE TICKER PEDESTRIANS WALKING OVER BRIDGE (SOUNDBITE) (Cantonese) FINANCIAL CONTROLLER, SAM POON, SAYING: "The downgrade of the U.S. credit rating will affect the stock market there and also cause the costs to rise. Therefore, its economic recovery will slow down. It will definitely affect the global market including the Hong Kong market." PEDESTRIANS WALKING OVER WALKWAY (SOUNDBITE) (Cantonese) SALES GIRL, ANGEL YUNG, SAYING: "At the moment I am not worried. I feel that the Hong Kong economy is very stable and I believe the situation in the U.S. is temporary. " PEDESTRIANS CROSSING ROAD SHANGHAI, CHINA (AUGUST 9, 2011) (REUTERS) EXTERIOR OF SECURITIES FIRM PEOPLE ENTERING SECURITIES FIRM PEOPLE LOOKING AT ELECTRONIC BOARD SHOWING STOCK PRICES ELECTRONIC BOARD SHOWING SHANGHAI COMPOSITE INDEX (SOUNDBITE) (Mandarin) 24-YEAR-OLD STOCK INVESTOR, HONG DINGMING, SAYING: "The American economy is stuttering so the outlook is quite bleak for the stock market. To add to this, there is also the possibility that the Chinese economy would be set for a hard landing. Also, the CPI (Consumer Price Index) and inflation is high, and there is a high risk of the economy decelerating. So I feel pessimistic about the Chinese stock market for the rest of the year." PEOPLE LOOKING AT ELECTRONIC BOARD ELECTRONIC BOARD SHOWING STOCK PRICES MORE OF PEOPLE INSIDE SECURITIES FIRM
- Embargoed: 25th August 2011 03:00
- Keywords:
- Location: China, Hong Kong, China
- City:
- Country: Hong Kong
- Topics: Economy
- Reuters ID: LVA9MBPSQKEQH0N9SDUESV9IDMC6
- Aspect Ratio: 4:3
- Story Text: Stocks in China trimmed early losses on Tuesday (August 9) with Hong Kong shares ending the day off lows but still in negative territory and Shanghai markets flat, supported by short covering and bargain hunting by investors in the latter part of trade.
Earlier in the day Hong Kong stocks posted their sharpest one-day drop since the 2008 financial crisis, falling almost eight percent, but rebounded to end down three percent at closing.
The afternoon rebound was driven by short covering ahead of the regularly-scheduled meeting of the U.S. Federal Reserve's Federal Open Market Committee (FOMC) later on Tuesday.
Short selling surged to 10.5 percent of total turnover at midday, the first time it has exceeded 10 percent since mid-June this year, according to exchange data.
Financial controller Sam Poon said the S&P downgrade of the U.S. credit rating from a AAA to a AA-rating will continue to cause volitility in global markets.
"The downgrade of the U.S. credit rating will affect the stock market there and also cause the costs to rise. Therefore, its economic recovery will slow down. It will definitely affect the global market including the Hong Kong market," he said.
But some investors were hopeful that the instability would be not be long-term.
"At the moment I am not worried. I feel that the Hong Kong economy is very stable and I believe the situation in the U.S. is temporary," said sales assistant Angel Yung.
Shanghai's markets reversed heavy losses to end flat on Tuesday as investors bought into stocks, particularly property names, driving the afternoon bounce in the mainland-listed A-shares that supported the Hong Kong market.
The Shanghai Composite Index closed down 0.03 percent to 2,526.07 points as A-share turnover exceeded its 20-day average for a second-straight day, totalling about 107 billion yuan ($16.6 billion USD).
Despite the day's recovery, some investors said global volatility and China's rising inflation could hit the Chinese stock market.
"The American economy is stuttering so the outlook is quite bleak for the stock market. To add to this, there is also the possibility that the Chinese economy would be set for a hard landing. Also, the CPI (Consumer Price Index) and inflation is high, and there is a high risk of the economy decelerating. So I feel pessimistic about the Chinese stock market for the rest of the year," said 24-year-old Hong Dingming.
China's National Bureau of Statistics on Tuesday said consumer price inflation quickened to a higher-than-expected 6.5 percent in July from June's 6.4 percent, buoyed by soaring demand in the world's second-largest economy.
But markets priced in expectations that weak economic conditions in the U.S. and Europe would prompt Chinese authorities to hold off on further interest rate rises.
If demand drops from the United States and Europe, however, China's next policy move may be towards easing, not tightening. - Copyright Holder: REUTERS
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