| Global Times | 2012-10-21 22:10:04
By Yu Xi in Shanghai
Stock markets on the Chinese mainland closed with moderate losses Friday as a drop in foreign direct investment (FDI) in the country during September countered the optimism which emerged Thursday after third quarter GDP growth met market expectations.
The Shanghai Composite Index finished at 2,128.30 points Friday, down 3.39 points, or 0.16 percent; while the Shenzhen Component Index closed last week at 8,796.42 points after falling 1.78 points, or 0.02 percent.
Both markets opened last week on a down note as worries about rising inflationary pressure in the fourth quarter dented trading sentiment Monday. Gains in brewing and real estate shares helped domestic A shares close Tuesday just barely above the break even point. Exchanges in Shanghai and Shenzhen finished with mixed results Wednesday as anxieties about the health of the domestic economy sidelined investors ahead of the release of a slew of macro indicators. As-expected GDP results for the third quarter, combined with statements from Chinese Premier Wen Jiabao that the economy was stabilizing, gave local stocks a lift Thursday.
The Shanghai Composite and the Shenzhen Component opened lower Friday and traded within a narrow range throughout most of the morning session. Contractions in the real estate sector dragged the indices down in afternoon trading. Losses in geothermal energy, and gas stocks weighed heavily on markets later in the day.
The gold sector also numbered among Friday's worst performers as jewelry sales slowed in China. Zhejiang Ming Jewelry Co dived 2.45 percent to 18.32 yuan ($2.93). Lao Feng Xiang Co, a jewelry company, declined 2.15 percent to 20.97 yuan.
Most analysts pinned Friday's lackluster showing at mainland equity markets on weakening FDI data released that day from the Ministry of Commerce. FDI in the country shrank 6.8 percent in September compared with the same month last year, complicating the recovery story which gave the markets a hoist the previous day.
Looking ahead into the coming weeks, the Shanghai Composite will likely continue to hover around the 2,100 point mark, but poor third-quarter corporate earnings may give the index little space to advance, Gui Haoming, chief analyst at Shenyin & Wanguo Securities, said in a report by the China Business News Saturday.
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