China's stock market fell after a brief recovery

15.07.2015

China's stock market fell on Wednesday after a brief rise, caused by the support of the government, despite the unexpectedly strong performance of the Chinese economy.

The index of the largest companies traded in Shanghai and Shenzhen, CSI300, declined by 3.5 %, while the index of the Shanghai Stock Exchange Shanghai Composite - by 3.0 %.

The index of the Hong Kong Stock Exchange, Hang Seng, dropped 0.3 %, while the index of Chinese companies traded in Hong Kong - by 1.3 %.

China's economy grew by 7 % in the second quarter, exceeding the forecast and repeating the figure of the first quarter.

"The mood in the market is still not very good," - said an analyst of Northeast Securities in Shanghai, Du Changchun, adding that the majority of investors, according to him, decided to take profits after a 10 % rise in share prices last week.

About a quarter of the companies which stopped the shares trading during the 30 % drop in the market in June, has not yet returned to the market.

"Investors liquidate positions because the GDP report failed to impress them, and signs of improvement in domestic consumption has not yet seen" - said the director of UOB Kay Hian in Hong Kong, Steven Leung.

But the Chinese data helped to raise other Asian stock markets. Japan's Nikkei rose 0.4 % to a maximum of 1.5 weeks.

Shares of exporters rose: Toyota Motor Corp with 0.9 %, Honda Motor Co by 1.6 % and Tokyo Electron Ltd by 0.5 %.

Quotes of Toshiba Corp fell 1.8 %, reaching a 2.5 years low because of errors in accounting.

South Korean index of Korea Composite Stock Price Index (KOSPI) rose 0.7 % due to the shares of construction companies. Investors hope for a growth in the number of contracts with Iran after the agreement on its nuclear program.

The index of construction companies rose 2.9 %; in particular, shares of Daelim Industrial Co Ltd rose 0.9 %.

Quotes of the refiner SK Innovation Co Ltd rose 1.9 %, while S-Oil Corp with 2.6 %, due to higher oil prices.

Shares of Hyundai Motor Co Ltd rose 0.8 % and its subsidiary KIA Motors Corp by 1 %.

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