China Stocks' Fall on Fed Inaction, Poor Corporate Results

Gene Linn |

China stocks lost hope Wednesday, or at least the hope they would gain substantially anytime soon from stimulus measures to help struggling economies in China and the U.S.

The Hang Seng Index in Hong Kong sank 1.1% to 19,240 in light trading, and the index of Chinese companies fell 0.9% to 9,293.

Stocks had rallied Tuesday on the hope that the U.S. Federal Reserve would stimulate the U.S. economy and on expectations a meeting of Chinese leaders Wednesday would launch measures to boost the weakening Chinese economic growth, according to Peter So, managing director and head of research at CCB International.

But the Fed did not loosen monetary policy, and the anticipated lift from new Chinese policies was diluted by poor corporate results in the Hong Kong market, So told Equities.

There may still be a bump on Thursday from new steps to bolster Chinese growth, he said, but it will be move will be muted.

“Investors will park their money for the short term in pharmacy companies, properties, utilities and other sectors,” So said. Winners may include SinoPharm (SHTDF) and Datang Power (DIPGY).

But So said, “People are still quite cautious. They will stay that way until the negative corporate results are out of the way. First half results were quite negative for sectors like shipping and building materials.” End

DAILY FIX

Hong Kong Blue Chips: -215, -1.1%, to 19,240, 07-18-12, Hang Seng Index

Chinese Stocks in Hong Kong: 88, -0.9%, to 9,293, 07-18-12, HSCE Index

Shanghai Stocks: +8, +0.4% to 2,169, 07-18-12, Shanghai Composite Index.

Chinese Stocks in the U.S.: -2.1, 359.2, 07-17-12, Bank of New York Mellon, ADR Index-China

Insight: Hong Kong opened lower after the U.S. Federal Reserve Board failed to announce new measures to stimulate the American economy, and losses continued to expand as Asian markets fell. Chinese properties dropped: China Overseas Land (CRBJY) -4.0%. China State Construction (CCOHY) plunged 8.1% after placing new shares for sale. KGI Research

Quotable: "We expect the Hang Seng Index to move between 18,500 and 19,500 this week." GUOCO Capital. 7-18-12

Chinese Company to Watch: Sinofert (SNFRY) manufactures and distributes fertilizers. "After dropping below the support level of $1.79, the counter’s share price lost 38% in 2 months. Trend stabilized afterwards and share price surpassed sma10-50 month-to-date with heavy turnover." Guoco Capital. 7-18-12

Brokerages and analysts cited here have disclaimers on their websites emphasizing their statements are for information only. They do not endorse my blog, and I don’t endorse them.

For a list of Chinese companies sold in the U.S. and information on each company go to http://www.adrbnymellon.com/dr_country_profile.jsp?country=CN

DAILY FIX

Hong Kong Blue Chips: -215, -1.1%, to 19,240, 07-18-12, Hang Seng Index

Chinese Stocks in Hong Kong: 88, -0.9%, to 9,293, 07-18-12, HSCE Index

Shanghai Stocks: +8, +0.4% to 2,169, 07-18-12, Shanghai Composite Index.

Chinese Stocks in the U.S.: -2.1, 359.2, 07-17-12, Bank of New York Mellon, ADR Index-China

Insight: Hong Kong opened lower after the U.S. Federal Reserve Board failed to announce new measures to stimulate the American economy, and losses continued to expand as Asian markets fell. Chinese properties dropped: China Overseas Land (CRBJY) -4.0%. China State Construction (CCOHY) plunged 8.1% after placing new shares for sale. KGI Research

Quotable: "We expect the Hang Seng Index to move between 18,500 and 19,500 this week." GUOCO Capital. 7-18-12

Chinese Company to Watch: Sinofert (SNFRY) manufactures and distributes fertilizers. "After dropping below the support level of $1.79, the counter’s share price lost 38% in 2 months. Trend stabilized afterwards and share price surpassed sma10-50 month-to-date with heavy turnover." Guoco Capital. 7-18-12

Brokerages and analysts cited here have disclaimers on their websites emphasizing their statements are for information only. They do not endorse my blog, and I don’t endorse them.

For a list of Chinese companies sold in the U.S. and information on each company go to http://www.adrbnymellon.com/dr_country_profile.jsp?country=CN

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
ACXM Acxiom Corporation 26.65 0.05 0.19 358,632

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