SCI falls to 2,957.14; Liquor companies rise

March 10, China’s key index fell below the 3,000 level, with coal and non-ferrous metal stocks leading the losses. The market was also hit by an unexpected trade deficit for February.

The Shanghai Composite Index lost 1.50% to close at 2,957.14, and the Shenzhen Component Index was down 1.17% to 13,004.9. The CSI 300 Index lost 1.76% to 3,280.26.

China today posted a surprise $7.3 billion trade deficit for February, its first since March last year, in contrast to expectations of a surplus, as export and import growth slowed sharply, bearing an impact from the Chinese New Year holidays during the month.

"The trade deficit data is likely to hurt the market sentiment as it indicates the liquidity conditions may be not as ample as some investors think," said Guotai Junan Securities analyst Shi Weixiang.

Coal producers were among the worst-performers on Thursday with the whole sector down 3.02%.

China Shenhua Energy Co. Ltd. (601088.SH), the nation's biggest coal producer, tumbled 3.99% and China Coal Energy Co. Ltd. (601898.SH), the second-largest, was down 2.96%. Guizhou Panjiang Refined Coal Co. Ltd. (600395.SH) slumped 5.80%.

Copper stocks led the declines among non-ferrous companies after the price of the metal fell 2.68% on the London Metal Exchange on Wednesday amid concerns about the outlook of the global economy due to escalating fighting in Libya.

Jiangxi Copper Co. Ltd. (600362.SH), China’s biggest producer of the metal, plunged 4.04% and Yunnan Copper Co. Ltd. (000878.SZ) was off 3.52%. Aluminum Corp. of China Ltd. (601600.SH) fell 2.69% and Tongling Nonferrous Metals Group Co. Ltd. (000630.SZ) tumbled 5.19%.

China is drafting an industrial development plan for next-generation information technology and will hopefully issue the final plan this year to boost the industry’s growth, the official Shanghai Securities News reported on Thursday, citing sources from the Ministry of Industry and Information Technology.

Inspur Electronic Information Industry Co. Ltd. (000977.SZ) jumped 6.12% and Shanghai East-China Computer Co. Ltd. (600850.SH) climbed 3.09%. Chengdu Santai Electronics Industry Co. Ltd. (002312.SZ) was up 1.18%.

Liquor-related stocks gained today. Kweichow Moutai Co. Ltd. (600519.SH) advanced 2.25% and Wuliangye Yibin Co. Ltd. (000858.SZ) was up 1.23%. Shanxi Xinghuacun Fen Wine Factory Co. Ltd. (600809.SH) jumped 5.70% and Lu Zhou Lao Jiao Co. Ltd. (000568.SZ) climbed 4.10%.

Investors speculated that middle and low-level liquor products would follow high-end alcohol commodities’ recent price gains.