Tags: Chinese | stocks | skids | drop

Chinese Stocks Hit the Skids, Might Drop Further

Thursday, 29 Nov 2012 01:01 PM

By Dan Weil

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Chinese stocks are tumbling, with the Shanghai Composite Index hitting a near-four-year low Wednesday, as traders stay away from the market.

The value of shares traded Monday totaled only 33.1 billion yuan ($5.3 billion), the lowest amount since Nov. 7, 2008, according to Bloomberg.

The Shanghai Index closed at 1,973.52 Wednesday, the lowest finish since Jan. 16, 2009 and below the psychologically important level of 2,000.

Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.

The Shanghai index first hit that mark at least 10 years ago, “and now we’re back at square one,” Hao Hong, managing director of research for Bank of Communications, told Bloomberg. “Now … people will be looking for the next support level, which could be 5 to 10 percent below here.”

Ironically, the decline comes despite recent signs of a rebound in the economy. For example, the government reported Tuesday that profit for industrial companies soared 20.5 percent in October. And both factory output and exports rose last month at the fastest pace since May.

"Confidence in the stock market appears to have reached a new low this year, with transaction volumes really thin now,” Deng Wenyuan, an analyst at Soochow Securities, told The Wall Street Journal.

“Investors are looking for policy signals ahead of the annual central economic work conference in December, but so far on the policy front, it seems muted."

He was referring to a meeting of China's senior leadership that gives an idea as to the next year’s economic policy and performance.

Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.

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