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Shanghai - China’s stocks fell to a 13-month low as slumping industrial companies’ profits increased concern the economic slowdown is deepening.
The Shanghai Composite Index dropped 0.5% to 2 736.84 at 08:44, extending Tuesday’s 6.4% plunge. The gauge pared a loss of as much as 4.1% after PetroChina, the most heavily weighted stock and long considered a favorite holding of state-linked rescue funds, jumped the most in three weeks. Net buying of Shanghai shares through the Hong Kong exchange link was poised for the highest daily total since September.
Slowing Chinese economic growth is hurting the earnings of domestic companies as well as global firms, with Apple forecasting a sales decline for the first time in more than a decade.
China Southern Airlines tumbled to a 10-month low after Daiwa Capital Markets Hong Kong estimated a fourth- quarter loss as a weaker yuan boosted the cost of servicing dollar-based debt. Data on Wednesday showed China’s industrial profits slid 4.7% last month, accelerating from the previous month’s 1.4% loss.
Strategists and technical analysts point to the growth slowdown as the reason why the Shanghai Composite may keep falling until it levels off around the 2 500 level.
“The market is still in the process of finding a bottom,” said Wang Zheng, Shanghai-based chief investment officer at Jingxi Investment Management. “To reverse the current situation, we’ll need more powerful measures from the government.”
