Markets end flat despite liquor strength

Tracy Li
Most sectors of China's stock market saw losses, with communications firms leading the decline ahead of trade companies, iron and steel makers and electronics firms.
Tracy Li

Major indexes on China’s stock market ended flat on Monday, despite the strong performance of liquor makers.

The benchmark Shanghai Composite Index inched up 0.02 percent to close at 3,397.29 after early gains were wiped out in afternoon trading.

The smaller Shenzhen Component Index gained 0.19 percent to finish at around 14,044.10, while the ChiNext Index rose 0.07 percent to end its trading day at 2,842.81.

Combined turnover on the two bourses came to 881.0 billion yuan (US$134.7 billion), compared with 793.7 billion yuan in the previous session.

Most sectors saw losses, with communications firms leading the decline. Trade companies, iron and steel makers and electronics names were among the top losers.

Food and beverage stocks, however, recorded big gains.

For the last trading week of 2020, Hu Wenyan, a senior researcher at Chasing International Economic Institute, warned in an interview with that investors should pay attention to several factors.

Funds at the end of the year tend to be tight overall and the disturbance caused by liquidity cannot be ignored, Hu said.

The recent deterioration of the pandemic situation overseas has led to an increase in market concerns about sustained economic recovery, which is not conducive to a sharp rise in risk appetite.

There are also still many uncertainties rising from overseas political and economic instability, which will intensify financial market turmoil. The negative spillover effect on A shares is worthy of high vigilance, Hu added.

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