BUSINESS Stocks end lower amid valuation concerns

BUSINESS

Stocks end lower amid valuation concerns

By Hu Yumo | SHINE

20:04, October 23, 2020

Shanghai stocks ended lower on Friday as investors locked in profits from consumer and pharmaceutical stocks amid concerns over lofty valuations.

The benchmark Shanghai Composite Index lost 1.04 percent to close at 3,278 points. For the week, the gauge declined 1.75 percent. The smaller Shenzhen Component Index dropped 2 percent to 13,128.46 points.

Trading volume on the two major bourses added up to 687.7 billion yuan (US$103.1 billion), compared with the previous trading day’s 663.7 billion yuan.

As for individual shares, nearly 22 listed firms posted gains of more than 9 percent, while 29 declined by over 9 percent.

Investors are concerned about high valuations in some sectors, including consumer and pharmaceutical shares, as they have made robust gains earlier this year.

Despite the decline in the A-share market, China's central bank on Friday pumped cash into the banking system to maintain reasonable and adequate liquidity. The People's Bank of China injected 70 billion yuan into the market through seven-day reverse repos at an interest rate of 2.2 percent.

Shanghai Fosun Pharmaceutical (Group) Co Ltd fell 5.40 percent to 52.75 yuan, while Shandong Huifa Foodstuff Co Ltd lost 3.13 percent to 20.45 yuan.

Guotai Junan Securities said market sentiment is suppressed by the COVID-19 pandemic overseas. It said investors should pay attention to opportunities after the release of companies' third-quarter financial reports.

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