Shanghai share prices fall by 8.49%
Print Edition
CHINESE stocks plunged by more than 8 percent yesterday, with investors said to be disappointed at the absence of policy support over the weekend after markets shed 11 percent last week.
Prices fell the most since 2007, with the Shanghai index giving up all its gains for the year.
The Shanghai Composite Index was down 8.49 percent to close at 3,209.91 points yesterday, sinking as much as 8.98 percent in the afternoon to post the biggest intraday drop since the market employed a price limit rule in 1996.
Only 15 shares rose while more than 2,000 retreated in Shanghai and Shenzhen bourses, including bellwether shares China Unicom Co and China Shipbuilding Industry Co which both declined by the 10 percent daily limit.
PetroChina Co, the nation’s largest company by market value and often seen as an indicator of market conditions, rose as much as 4.3 percent in the afternoon but closed 4.9 percent short at 9.51 yuan (US$1.49).
The Shenzhen Component Index fell 7.83 percent to 10,970.29 points, while the Hang Seng lost 5.17 percent to 21,251.57 points.
On Sunday, the State Council said it was allowing pension funds to invest as much as 30 percent of net assets in stocks. Pension funds had net assets of 3.5 trillion yuan at the end of last year, Xinhua news agency said, but analysts said the move was not enough to raise investor confidence.
“It was positive, but not having the expected required reserve ratio cut or any other larger measure seems to have disappointed investors,” Gerry Alfonso, a trader at Shenwan Hongyuan Group Co, told Bloomberg News. Deutsche Bank also said in a report that the absence of rescue measures at the weekend was “the biggest incentive to trigger the market rout.”
It added: “There are expectations for the cut since the government did it last time, but the unmoved weekend worsened investors’ confidence.”
The Shanghai index has tumbled more than 20 percent since the yuan’s devaluation on August 11 and has lost more than US$4 trillion in value since its June 12 peak.
Mark Matthews, managing director and senior adviser at Bank Julius Baer, said the current situation will persist for another month, since concerns remain that growth in the world’s second largest economy is slowing.
A key China economic indicator for August took a sharp turn for the worse on Friday, with the Caixin Flash China General Manufacturing PMI plunging to a 77-month low of 47.1.
“The market is simply about fear and greed. I don’t see any greed at present,” Matthews said. However, he forecast better days in around six months as reform of China’s state-owned enterprises progressed.
Asian shares tumbled from Sydney to Tokyo yesterday, with Japan’s Topix index dropping 5.9 percent and Singapore’s Straits Times Index sliding 3.5 percent. Australia’s S&P/ASX 200 Index also retreated 4.1 percent.
Bank of America Merrill Lynch said Asia countries had entered into a bear market, but said it was “overanxious to talk about an Asian financial crisis due to the recent weak economy and currency devaluation.”
It said the Chinese government should cut reserve ratio requirements and interest rates to boost investor confidence.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
