Key index ends flat on investor jitters over data and loans
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E-mail Shanghai Daily, May 8, 2012
Shanghai stocks ended flat yesterday as investors were jittery about macro-economic data due out on Friday and they were also spooked by the slump in new loans in April.
The Shanghai Composite Index closed at 2,451.95.
Major financial institutions estimated that China's Consumer Price Index grew 3.4 percent year on year last month, lower than 3.6 percent in March, while new loans fell sharply to 800 billion yuan (US$126.4 billion) in April from March's 1.01 trillion yuan, China Business News reported yesterday.
While Fan Wei, chief analyst at Hongyuan Securities, said a lower CPI will have positive impact on the stock market, Everbright Securities disagreed.
"The CPI is stabilizing, but inflationary pressure persists," said Teng Yin, chief investment consultant at Everbright Securities.
Lian Ping, chief economist at the Bank of Communications, said new loans fell sharply in April amid the economic slowdown. Credit demand weakened on speculation that corporate profitability is falling. Banks were also cautious about lending due to risk controls put in place.
Developers fell after Xinhua news agency reported the Industrial and Commercial Bank of China has suspended a discount on mortgages for first-time homebuyers nationwide. Gemdale Corp, China's fourth-biggest listed developer, lost 2.5 percent to 6.63 yuan.
Aluminum Corp of China Ltd rose 4.2 percent to 7.50 yuan after its parent said the government asked it to play a leading role in the consolidation of the rare earth industry.
