China shares fall, market shrugs off upbeat economic growth forecast

Business Monday 16/October/2017 12:50 PM
By: Times News Service
China shares fall, market shrugs off upbeat economic growth forecast

Shanghai: China's major share indexes fell on Monday as a surprisingly strong central bank economic growth projection failed to spur buying while tech stocks slumped after disappointing profit forecasts.
Central bank governor Zhou Xiaochuan said the economy was expected to grow 7 per cent in the second half of this year, accelerating from the first six months and defying widespread expectations for a slowdown.
The blue-chip CSI300 index fell 0.2 per cent, to 3,913.45 points, while the Shanghai Composite Index lost 0.4 per cent to 3,378.47 points.
The tech-heavy start-up board index ChiNext slumped 2.3 per cent, posting its worst day in three months, as investors retreated after lacklustre profit forecasts by big-name tech plays.
Wangsu Science & Technology dived the maximum allowed 10 per cent to a seven-week low after predicting a big fall in net profit in the first nine months.
Leshi Internet, a listed unit of Chinese conglomerate LeEco, said after the market's close on Friday that it expect to swing to a large loss for the first nine months. Shares in the firm have been suspended since April.
Many analysts expect stability in China's share market this week, when a key party congress opens.
Chen Xiaopeng, Shenzhen-based strategist at Sealand Securities, said the market would likely remain highly stable in the near term.
"There's limited room for stocks to fall due to the congress, and there's not much catalyst on the upside either," Chen said.
There was little excitement after data showed China's producer price inflation (PPI) unexpectedly accelerated to a six-month high in September, and Chinese banks extended more loans than expected last month.
"We think the general market outlook is for a 'modest' economic slowdown in the next six months," UBS Securities China strategist Gao Ting wrote on Monday.
Gao identified several sources of concern, including higher interest rates due to supervisory tightening, a continuing slowdown in the housing market, and forceful planned production curbs over the coming winter in areas surrounding Beijing.