Stock markets unshaken despite Sichuan events

Share performances reflect market confidence in economic recovery

Natural disasters can be a major test for any nation's economic resilience.

Had Sichuan province been a country in its own right, its economy might now be facing devastation for the second time in a handful of years, after the 7-magnitude quake in Ya'an over the weekend.

The first was in 2008, when it was hit by the 8-magnitude super killer quake in Wenchuan.

But in reality, Sichuan can rely on economic support from all over China, orchestrated by the central government, and share performances on Monday reflected overall market confidence that its economy will recover from the latest shock.

Both Shenzhen and Shanghai stock markets remained largely flat, but some shares seen as closely related to the events in Sichuan, did react, particularly cement, construction materials, and medical stocks.

Initial official estimates are that about 400,000 houses in Ya'an have been damaged, of which 12,850 have been flattened.

Joined by the extensive destruction of farm resources and public infrastructure, the total economic loss is being estimated at 1.43 billion yuan ($230 million).

Yang Weixiao, a senior macro and fixed income analyst at Lianxun Securities Beijing, suggested the final loss could be much bigger, "somewhere between 10 and 20 billion yuan".

Losses from the Wenchuan earthquake have been estimated at 845 billion yuan.

Of all the listed companies either based in, or with hefty business interests in Sichuan, 91 released initial damage reports to the market on Monday.