Stocks get off to an unhappy New Year

Source: Xinhua | 2019-01-03

Triggered by a worse-than-expected reading for the country’s factory activity in December, Chinese shares slipped on the first trading day of 2019, with the benchmark Shanghai Composite Index dipping by 1.15 percent.

The Shanghai composite, the country’s major share average, fell 1.15 percent or 28.61 points to close at 2,465.29, following disappointing results the manufacturing sector last month.

On Monday, the National Bureau of Statistics released the official Manufacturing Purchasing Managers’ Index, which dropped below the critical 50 level to 49.4.

This marked the first contraction since July 2016 and the weakest reading since February 2016.

A reading above 50 reveals expansion, while a reading below that indicates contraction.

A private survey by Caixin/Markit yesterday showed that the reading dipped to 49.7 in December from 50.2 in November, lower than a Reuters poll which predicted a reading of 50.1.

The smaller Shenzhen Component Index dropped 1.25 percent to end at around 7,149.27 points, while the Nasdaq-style ChiNext enterprise board shed 1.74 percent to finish at 1,228.77 percent.

Medical and pharmaceutical names led the losses, with Huadong Medicine Co Ltd plunging by the daily limit of 10 percent to close at 23.81 yuan (US$3.74).

The A-share market posted the worst performance in a decade last year.