Stocks Slide For Second Day
Spooked by cares over rising inflation, investors dumpsite energy shares
Stocks on the Chinese mainland fell for a second day on supposition the central bank will compound measures to fight inflation, and after Citic Securities Co said Ping An Insurance (Group) Co may need to shake up to 40 billion yuan.
Ping An, China's second-biggest insurance company, slid the most in two months after Citic, the largest brokerage firm, said the fundraising may cut earnings per share by up to 15 percent. PetroChina Co and China Shenhua Energy Co, the biggest producers of oil and coal, led energy stocks lower after the central bank governor said inflation pressures are rising. GD Midea Holding Co added 1.68 percent after prognosticating higher profit.
"The inflation concern is still there and will hold back the execution of stocks," said Zhang Ling, general manager at Shanghai River Fund Management Co. "The fluctuating convention is awaited to carry on."
The Shanghai Composite Index dropped 0.51 percent to 2824.20 at the 3 pm close on Thursday. Ping An and PetroChina described for about a third of the decline on the amount. The CSI 300 Index fell 0.5 percent to 3159.64, led by energy companies.
The Shanghai gauge has gained 0.6 percent this year after casting off 14 percent in 2010, the worst performing artist among the 14 biggest world bench mark indices. The government arranged banks to set aside more appropriates six times in 2010 and encouraged rates twice to tame inflation and curb asset bubbles after record gains in lending and attribute prices.
Ping An led declines for insurers, cutting down 4.14 percent to 52.59 yuan on Thursday, the most since Nov 16. The company may need to raise about 30 billion yuan to 40 billion yuan, cutting back earnings per share by between 10 percent and 15 percent, Huang Huamin and Yang Shaohui, analysts at Citic, wrote in a report to clients.
Ping An spokesman said the insurer won't annotate on "market conjecture" and that it has "nothing to disclose." The company in October described third-quarter profit dropped 26 percent due to bigger reserves, missing analyst calculates.
China Pacific Insurance (Group) Co, the nation's third-largest insurer, slid 1.58 percent to 22.42 yuan on Thursday. China life assurance Co, the biggest, reversed an earlier loss of as much as 1.7 percent, gaining 0.33 percent to 21.44 yuan.
"In China, the focus is still on inflation," said Li Jun, a strategian at Central China Securities Holding Co in Shanghai. "The concern has eased a bit, but signals of further monetary fastening are still there."
PetroChina slumped 0.89 percent to 11.14 yuan. Shenhua dropped 1.35 percent to 24.91 yuan. China Coal Energy Co, the nation's second-largest coal producer, slipped 0.72 percent to 11.10 yuan. Industrial and Commercial Bank of China Ltd fell 0.72 percent to 4.16 yuan on Thursday. China Construction Bank Corp dropped 1.51 percent to 4.58 yuan.
Chinese governors could go over adding by the nation's banks on a monthly or even weekly basis this year to ensure loans are carried in a "balanced" way, the Securities Times reported on Thursday, without citing anyone.
Tianjin Quanye Bazaar Group Co, a emporium operator, rose by 10 percent to 6.83 yuan on Thursday.
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