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Published on : Jul 09, 2014

China’s economy is slowing down, which will hurt earnings growth. During this period, stocks in China have declined to its lowest in a week, contributed by the industrial and energy companies.

SHCOMP which is the Shanghai Composite Index has declined by 0.1% to 2,057.06 as reported few days back, which is ahead of inflation and trade data indicated presently. Also, Yanzhou Co. which is a coal mining company showed declines among its energy stocks with a loss of 1.4 percent. China’s second largest maker of power equipment which is Dongfang Electric Corp. lost by 2 percent. However, Sinocare Inc. climbed by 10 percent as the index ChiNext increased for the first time in the past few days.

During the month of June the consumer prices increased by 2.4 percent, which was slowdown from a 2.5 percent gain reported a month earlier. The producer costs also declined by one percent, when compared to a 1.4 percent decline in the month of May. Data shows that exports grew by over 10 percent in the month of June from the 7 percent reported in the last month.

According to a market strategist the investors have become cautious, because it will be even more difficult for major economic data to overcome the market expectations and no lift is going to occur.

The strategist also said that estimating profits from corporate sector will jump by 6 percent during the second quarter and down by 8.5 percent observed in the first quarter.