Shanghai stocks close down 5.33% on economic gloom
January 11 2016 11:06 AM
China stocks
China stocks

AFP/ Shanghai

China's benchmark Shanghai stock index closed down 5.33 percent on Monday, as investors continued to worry over the state of the world's second largest economy, dealers said.
The Shanghai Composite Index plunged 5.33 percent, or 169.71 points, to 3,016.70 on turnover of 286.4 billion yuan ($43.6 billion).  
The Shenzhen Composite Index, which tracks stocks on China's second exchange, tumbled 6.60 percent, or 130.62 points, to 1,848.10 on turnover of 377.8 billion yuan.
The Shanghai index fell nearly 10 percent last week, slammed by concerns over China's flagging economy, weakening currency and a regulatory blunder.
On Friday, authorities reversed course and suspended a new "circuit breaker" mechanism that had fuelled a global rout by twice automatically closing Chinese markets early in just four days.
Pessimism towards the economy persisted after the government said on Saturday that China's consumer price inflation came in at 1.6 percent in December, well short of the government's target of "around three percent".
"The market is already in a downward spiral and it's still exploring the bottom after last week's plunge," Zhang Yanbing, an analyst at Zheshang Securities, told AFP.  
"The economy remains weak and there's no driver for a market rebound."
Global investors have been alarmed by slowing growth in the world's second-largest economy, which is expected to have expanded last year at its slowest pace in a quarter of a century. Official data on fourth-quarter and annual growth is due to be released later in January.
To the dismay of investors, China's central bank also guided the yuan currency down, setting its daily fix lower for eight sessions, representing a 1.4 percent fall, before a slight reversal on Friday.
On Monday, the People's Bank of China set the daily reference rate -- around which the yuan can move up or down two percent -- at a stronger 6.5626 to $1.0.

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