China's industrial profits dropped 0.3%

Monday, Jul 27 2015

Chinese industrial profits, which rose on an annual basis in April and May, dropped in June, adding to pressures on a economy that is struggling to regain momentum. Profit at China's industrial firms dropped 0.3% in June from a year earlier, the National Bureau of Statistics (NBS) said on Monday.

That reversed a 0.6% rise in May and 2.6% gain in April, the first month since September 2014 in which industrial profits were higher than a year earlier.The bureau said falling prices pulled down firms' profit margins in June even though recent interest rate cuts were lowering companies' financial costs.

For the first six months of 2015, industrial profits were 0.7% lower than a year earlier, the bureau said. Among 41 industrial sectors, 30 sectors had year-on-year growth in the first half of this year, while 11 recorded drops. Profits in mining sector fell 58.8% in the first six months from a year earlier, while earnings of crude oil and natural gas producers tumbled 68.4%.

On the upside, oil processing, coking coal and nuclear fuel processing industries combined saw profits jumping 78.7% in January-June while the bureau said computers, telecommunications and electronics firms together had a 19% increase. According to the bureau, interest payments by industrial firms in June were 6.2% less than a year earlier, the biggest drop this year.

China's central bank has cut interest rates for three times this year, in a bid to support an economy headed for its poorest performance in a quarter of a century.

Aussie added few points this morning currently being traded slightly below 0.73 handle. Pair is likely to find support around 0.7250 level and resistance above 0.7350 area. Later today, in the US session, Durable Goods Orders data was released.

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