China: Stocks mixed ahead of economic growth figures

[SHANGHAI] Chinese shares were mixed by midday on Tuesday, as the impact of government boosts to the market persisted ahead of second quarter economic growth figures Wednesday, dealers said.

The benchmark Shanghai Composite Index edged down 0.32 per cent, or 12.55 points, to 3,957.84 in volatile trading which saw the index rise as much as 1.64 per cent and fall up to 1.22 per cent in the morning.

But the Shenzhen Composite Index, which tracks stocks on China's second exchange, added 2.32 per cent, or 49.24 points, to 2,169.49.

After Shanghai fell 30 per cent in three weeks from its peak in mid-June, the government last week moved to slow the rout with a police crackdown on short-selling and a ban on big shareholders and company executives from selling stock for six months, adding to earlier measures.

Investors are also awaiting the release of China's gross domestic product (GDP) data on Wednesday.

China's GDP growth probably slowed further in the second quarter to 6.9 per cent, an AFP survey found, down marginally from 7.0 per cent in the first quarter.

If the forecast is realised, it would be the worst quarterly result since the first quarter of 2009 at the depths of the global financial crisis, when China's economy expanded by just 6.6 per cent.

On Monday, the government said China's total trade slumped 6.9 per cent to US$1.88 trillion in the first half of this year, falling well short of Beijing's targets and dealing a blow to the global economy from its biggest trader in goods.

More than 250 stocks were scheduled to resume trading on Tuesday, Bloomberg News reported, after more than 1,400 quoted companies - around half of all those listed - were suspended at the peak of the turmoil.

Trading suspensions tend to slow market activity and defer risk until later, but China's markets have weathered the resumptions so far.

"Since the market is expecting a strong rebound after the plunge, it will be able to reach between 4,200 and 4,500 points in around one to two months," Chen Xingyu, a Shanghai-based analyst for Hong Kong's Phillip Securities, told AFP.

Technology companies were higher. In Shanghai, Daheng New Epoch Technology surged by its 10 per cent daily limit to 19.42 yuan while Hundsun Technologies also jumped 10 per cent to 88.96 yuan, despite being inspected by China's market regulator over allegations it had a role in recent market volatility.

Natural gas companies were also higher in Shanghai. Chongqing Gas Group rose 2.75 per cent to 13.09 yuan and Sichuan Datong Gas Development jumped its 10 per cent daily limit to 8.44 yuan.

AFP