China Stock Roundup: Yingli Green, LightInTheBox Report Losses

Markets declined over the week, weighed down by curbs on investors and regulatory actions to curb the insurance sector. The benchmark index declined by the most since June on Monday. The Shanghai Composite Index rebounded on Tuesday after encouraging retail sales and factory output data boosted investor sentiment. The benchmark index closed at its lowest level in a month on Wednesday, The Shanghai Composite Index declined again on Thursday, falling to a new one month low.

Yingli Green Energy Holding Company Ltd. (YGE - Free Report) , also known as Yingli Solar, reported adjusted net loss of $2.18 per American Depositary Share (“ADS”) in third-quarter 2016, wider than the Zacks Consensus Estimate of a loss of $1.30. LightInTheBox Holding Co., Ltd. (LITB - Free Report) reported third-quarter 2016 loss of 3 cents per share, in line with the Zacks Consensus Estimate.

Last Week’s Developments

Last Friday, the Shanghai Composite increased 0.5% after inflation data came in above expectations, indicating that the economy was stabilizing. The CSI 300 gained 0.3%. However, the benchmark index ended a winning stretch of eight consecutive weeks of gains after authorities cautioned that certain takeover deals were “barbaric” in nature. The benchmark index lost 0.3% over last week while the CSI 300 declined 1%, also snapping an eight week long winning streak. 

Large caps led indices higher over the day after China’s November PPI increased at the sharpest pace in five years. A hike in prices of building materials, coal and steel led this increase. CPI also rose faster than expected, increasing 2.3% year-over-year. This was the fastest pace recorded since April, primarily due to rising food prices.

Meanwhile, the Shenzhen index declined 0.7% during the first week of the Shenzhen Hong Kong exchange link. The Hang Seng lost 0.4% while the Hang Seng China Enterprises Index moved 0.3% lower.

Markets and the Economy This Week

The benchmark index declined by the most since June on Monday, losing 2.5%. Fears regarding the possible policies of a Trump administration and concerns about new regulatory restrictions on insurers were primarily responsible for these losses. Investors in Hong Kong also seemed rattled, particularly by indications that the Federal Reserve was likely to raise rates this week. The CSI 300 declined by 2.4%.

Market watchers opined that the market had taken losses because prominent insurers were being prevented from purchasing stocks. Additionally, U.S. President-elect Donald Trump has recently questioned the existing “one China” policy of the U.S. by separately acknowledging Taiwan. This was another reason for the decline in Hong Kong shares. The Hang Seng lost 1.4% while the Hang Seng China Enterprises Index declined 1.7%.

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