For the 2nd day consecutively, Chinese stocks have gone down as the valuations reached the highest figure in last 9 months. Incidentally, right on this week, the industrial output and Gross domestic product related data are expected to come out. Today’s decline in the stock was led by the industrial and financial companies. The Shanghai Composite Index declined by 1.1% and was at 2284.91 at time of close. On the other hand, the CSI 300 Index went down by 0.9% to 2552.76. Because of investors’ concerns that the shares were overbought, the benchmark gauge suffered a drop of 0.7% on yesterday as well. Incidentally, The Shanghai index has posted total gain of 17% since 3rd December as there were signs that the Chinese economy has started to recover. The Government has also been pushing hard to develop the urban areas of the country.
The Strategist of Central China Securities Holdings, Zhang Gang stated that the investors are finding new excuses to take away profits. He added that the Shanghai gauge will not fall further and with help of a few factors, it can actually go to a higher level. He commented that in such a scenario, a positive GDP or Industrial data will certainly be helpful.
The average trading volume in the Shanghai index was 3.4% more than the 30-day average on today. On the other hand, the 30-day volatility was at 21.6. Incidentally, it averaged at 17.1 in 2012. The HSCEI index experienced a decline of 0.5%, whereas, the index measuring US listed Chinese companies also got down by 0.6%.
The biggest insurer of the Asian powerhouse, China Life Insurance Co., went down to its lowest level in 2013 as the Credit Suisse Group AG cut down its recommendation on the insurer’s stocks. The 2nd biggest insurer in the country, Ping An Insurance also slumped by 1.9%. The biggest construction company of the country, China Railway Group also experienced a slump of 1.8%. Incidentally, the company has seen an increase of 13% since 3rd December. North Navigation Control Technology Co., posted its biggest decline in more than 5 years, as its priced slumped by 1.32 Yuan. On the other hand, the China Spacesat shares also went down by 10%, thereby putting a halt on the 34% gain that the company experienced in last 5 days.