China Stocks 'Now Face Reality'

Gene Linn |

China Stocks 'Now Face Reality'China stocks continued their sharp decline Wednesday with no early end to the downturn in sight.

Hong Kong's Hang Seng Index dropped 1.1% to 20,141 in slow trading. The index of Chinese companies sank 0.9% to 10,504.

The Hang Seng will probably fall to 19,500 before stabilizing, one analyst told Equities in an email. After that, market movement will depend on news flow.

Hong Kong and other global markets were propped up in the first quarter by cash injections by the European Central Bank in efforts to ease the Euro debt crisis, the analyst said.

“Now they will have to face reality: Europe ’s debt problem and Chinese economy is slowing down.”

China's slumping economic growth has not yet been fully digested by the market, according to the analyst.

“I think stocks with high-yields will outperform in 2012, such as Hong Kong utilities BUT NOT Chinese utilities,” He said. “When the economy slows, they face the risk of oversupply, eg. electricity, coal etc.” End

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
AXL.DB.B:CA Anderson Energy Inc. 7.25% convertible unsecured s n/a n/a n/a 0

Comments

Emerging Growth

Propanc Health Group Corp

Propanc Health Group Corp is an early stage healthcare company. It is engaged in developing new cancer treatments for patients, suffering from pancreatic and colorectal cancer.

Private Markets

MyForce, Inc.

As parents, we constantly worry about the safety of our loved ones. The media bombards us with incidents from across the nation school shootings, frequent assaults on campuses, and crimes…

Knightscope

Autonomous security robots providing advanced detection capabilities at $7 per hour - aiming to define the future of security. Help #StopTheViolence.