hr: Money

Photo Credit: Petrick2008

Chinese stocks incurred heavy losses as they end their worst week ever out of five, amidst concern that the said drop in stocks after the earthquake last week will be much larger than what investors initially expected.

Today the China’s biggest producer of gold, Zijin Mining Group Co., incurred so much losses and is now at its lowest since the first day of trading after the decline in metals. Jiangxi Copper Co. also fell to its lowest this month.

China United Telecommunications Corp., however, showed signs of improvement as it surged before a trading suspension despite reports that China’s phone industry is being reorganized by the government.

“The earthquake has further weakened market sentiment, prompting investors to sell first as they gauge the real loss it has caused to the economy,” according to investment manager Yan Ji, HSBC Jintrust Fund Management Co., Shanghai.

“Market sentiment is pretty weak. Any negative factor, such as the retreat in commodity prices, will trigger selling of related shares,” said fund manager Wu Kan, Dazhong Insurance Co., Shanghai.

The earthquake that wrecked havoc on Sichuan province May 12 had a magnitude of 7.9. The calamity was the cause of death of greater than 55,000 people.

The earthquake disrupted production that of course resulted in losses. Companies such as Sichuan Hongda Chemical Industry Co. and Dongfang Electric Co. have suffered tremendous losses that reached an estimated 67 billion yuan (about US$9.6 billion), according to the Ministry of Industry and Information.