Shanghai market sinks to 15-month low

By Lydia Chen  |   2008-6-13  |     ONLINE EDITION

A BROAD sell-off in the market dragged Shanghai's key stock index down for an eighth-straight day today and sent the index to its lowest level since March last year.

The Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B shares, lost 3 percent, or 88.73 points, to 2,868.80 at 3pm.

Losers in the Shanghai market outnumbered gainers 735 to 61 while nine were unchanged.

The Shanghai index has slid since the central bank ordered lenders to set aside record reserves to curb inflation on June 7. It lost 13.85 percent or 460.87 points this week.

The Shenzhen Composite Index, which tracks the smaller domestic stock exchange, was down 3.95 percent, or 35.19 points, to 855.80 today.

Shares continued to fall even after the National Bureau of Statistics yesterday announced that the country's inflation rate rose at a slower pace of 7.7 percent last month.

The consumer price index, the main gauge of inflation, increased 7.7 percent last month year on year, following jumps of 8.5 percent in April and 8.3 in March.

The index jumped to a near 12-year high of 8.7 percent in February.

But analysts said this news did little to lift stocks as there had been speculation over the figure in the market earlier in the week and investors are concerned that the CPI may remain high.

Securities and property shares were among stocks losing ground today amid concerns that a falling market will hurt earnings.

Citic Securities Co, China's biggest publicly traded brokerage, sank 7.77 percent to 27.52 yuan (US$3.98) while Hongyuan Securities lost 7.62 percent to 19.03 yuan.

China Vanke, the nation's biggest developer, lost 4.90 percent to 16.50 yuan while Poly Real Estate, the second biggest, slumped 7.37 percent to 13.96 yuan.