China Stocks Look Set to Snap Long Losing Streak
Chinese shares are due for a technical rebound Wednesday after the longest losing streak seen this year.
The Shanghai Composite Index slipped 0.09 percent to 2222.07, but property stocks bucked the downtrend due to hopes of more local governments' measures to stimulate housing demand. Trading volume dwindled to a six month low.
The Ministry of Commerce said June actual use of foreign capital rose slightly to $9.2 billion, turning around from six months of declines. Ministry spokesperson Shen Danyang also gave an upbeat assessment of June trade figures, describing them as "on a par with May," which was a strong month. He also said that judging from commerce and trade numbers, things are "not that bad," in response to regulators' warning to state firms that they should be ready for "three years of winter." The spokesperson was confident that China can achieve its 10 percent trade growth target for 2012.
Stocks to Watch:
Property Stocks - The website Netease is reporting that Shanghai is experimenting with tighter property curbs that stipulate single nonresidents cannot buy homes in Shanghai, even if they fulfill the one year tax and social security payment requirements. This follows Shanghai disallowing the practice of back-dating social security payments so nonresidents could purchase homes in Shanghai without satisfying the residence requirement. Shanghai — once the hotbed of property speculation — is seen as setting an example for other cities.
BYD - Caijing reports that the battery and car maker is cutting salaries by 14 percent due to dismal sales. It is estimated that BYD may save 240 million yuan ($38 million) in costs from the move.
—By Cheng Lei, CNBC Asia Pacific