China’s Stock Index Plummets The Most
In A Month
Stocks in
China declined the most in a
month as investors sold shares in the market on
the concern that valuations had approached extremes. Leading declines, not to the market’s
surprise, were banking shares.
Notably, stock in China Minsheng Banking and China
Merchants Bank Co. led declines on the day. Minsheng, the nation’s first privately
held lender, dropped 6.3 percent on the day to 13.53 as China
Mercahnts Bank, the country’s seventh largest, slipped 6.1 percent to
20.80. However, attempting to
mitigate the day’s losses were retail stock as the retail sales report showed
optimistic results. Consumer stocks
including Mongolia Yili
Industrial
Group led advancers on the day.
Separately, shares of Bank of Communications Ltd. skyrocketed on its
debut in Shanghai, advancing 71 percent since the open.
For the record, the benchmark CSI
300 index
plummeted 129.78 points or 3.5 percent in the overnight session.
Retail Sales Vault Higher On
Noticeable Wage Climb
Retail
sales in the world’s fastest growing economy skyrocketed on the day, well
supported by increases in wages that have spurred consumer spending. For the month, sales rose 15.5 percent on the annualized
comparison to 667.3 billion yuan after gaining 15.3 percent in the month of March, according
to the country’s statistics bureau. The biggest increase since 2004, the
report remains encouraging and supportive of the overall economy as consumers
are drawing additional confidence from a booming stock market. However, with equity markets at extreme
highs, some are beginning to question the current momentum, that may ultimately
and adversely be affected by a
“correction” as per Goldman analysts just a couple of days ago. Bullish for the underlying currency, the
Chinese yuan remained under pressure during the London session as the currency continued to
pullback slightly on fears that two way flows will jeopardize further
advancement in the currency.
Heading towards the New
York close, the Chinese yuan was trading at 7.6845
against the US dollar, far
back from the 7.6750 seen just days ago.
Singapore Retail Sales Take A
Hit
For the month of March, Singapore retail sales took the
bigges hit in more than two years, sparking the likelihood that policy officials
will cut forecasted growth estimates for the economy. The headline index, released in the
overnight session, dropped 6 percent in the year on year comparison. Although considered a modest pullback
from the 18.1 percent acceleration seen last month, the dip was the second decline in three months and bucked a 3.6
percent estimate by the consensus, according to the Statistics Department. With Singpaore’s industrial production
numbers to the downside, the market is beginning to price in the plausible
scenario of a lower revision to overall growth as exports have now risen at the
slowest pace in almost two years. Reductions are expected to be placed
below the 7.2 percent rate seen in the first quarter. Subsequently, the report helped to push
the USDSGD back higher to the
1.5200 figure, trading slightly lower in the New York session on profit
taking.
Hang Seng and Straits Come Under
Weakness
As a
result of regional weakness, benchmark indexes
in both Hong Kong and Singapore also dropped in the
overnight. Notably Hong Kong stocks
declined from a record as China Mobile shares slid on speculative relation
with Shanghai
stocks. As traders pulled back
positioning company shares, China Mobile stock slipped 20 cents
to HK$73.55. HSBC helped to
exacerbate equity downside, falling 60 cents to close at HK$146.30. Ultimately, the Hang Seng finished lower
by 111 points, closing at 20,868.15.
The Straits Times index failed to
perform any better as shares remained under pressure, pulling the benchmark
index lower
through record high hit yesterday. The Singapore stock market closed lower,
down 26.02 points at 3,475.08.
