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Shanghai stocks plunge most in two months

Shanghai shares tumbled the most in two months today, registering its third consecutive weekly loss after the strong rebound in March.

The Shanghai Composite Index declined 2.82 percent to 2,913.25 points at close. The gauge traded flat in the first hour of morning session, but soon stalled down as commodity shares led the decline.

Yanzhou Coal Mining Co slumped 5.3 percent to 10.01 yuan (US$1.5), while Jiangxi Copper Co decreased 3.62 percent to 13.56 yuan.

Analysts say investor patience is wearing thin as the Shanghai gauge has failed to stay above the key 3,000 mark in recent weeks, while the fears are spreading that more companies need to sell shares to raise fund for debts as the economy remains fragile.

More than 20 listed companies in A-shares reduced holdings in the last two trading days, posting net reduction of shares to more than 20 billion yuan of worth since March 7, according to companies' announcements filed to Shanghai Stock Exchange.

"If the market cannot make a breakthrough upward, then going down would be the natural choice, given the lack of good news on the fundamental front," said Chang Chengwei, analyst at Hengtai Futures Co told Reuters.

Market sentiment was further stroke down by rumors on Thursday night, saying that the regulator plans to suspend the process of initial public offerings or back-door listings of some overseas-listed Chinese companies that seek to go private and list back in mainland bourses.

"Public sentiment called in question on such capital hype of re-listing," said Zhang Xiaojun, spokesperson of China Securities Regulatory Commission, on a weekly media briefing yesterday.

Zhang added that the commission is paying highly attention to market's reaction to this and will analyze its impact to A-shares in the future.




 

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