Shanghai index drops as brokerages slide

By Pan Xiaoyi  |   2008-11-3  |     ONLINE EDITION

SHANGHAI’S key stock index ended lower today, led by brokerages on speculation that short selling and margin trading will be postponed.

The Shanghai Composite Index fell 0.52 percent, or 9.01 points, to 1,719.77 points, after reaching an intraday low of 1,702.98.

Losers outnumbered gainers 581 to 266 while 31 remained unchanged. Turnover in the local market shrank slightly to 23.74 billion yuan (US$3.49 billion), compared with 25.9 billion yuan on Friday.

The Shenzhen Composite Index, which tracks the smaller domestic market, dropped 1.03 percent, or 4.86 points, to 466.05 points.

The China Securities Regulatory Commission said earlier it would not receive the application for short selling and margin trading business before December.

Haitong Securities Co, the country’s largest listed brokerage by market value, led brokerages down as a lock-up period will expire this month for more than 1.2 billion yuan of its shares. Its shares plunged the 10 percent daily cap to 16.60 yuan. Sinolink Securities Co lost 7.19 percent to 23.11 yuan while CITIC Securities Co tumbled 6.33 percent to 16.71 yuan.

Bucking the downward trend, lenders gained after Xinhua news agency said on Saturday the central bank removed controls to maintain "relatively fast" economic growth and counter the financial crisis.

The People's Bank of China will closely monitor global financial turmoil and will use a combination of macro-economic policies to boost domestic demand, Li Chao, the central bank's spokesman, was quoted as saying. China has the "full ability" to counter the financial crisis, Li said, according to Xinhua.

Shanghai Pudong Development Bank Co, the Chinese partner of Citigroup Inc, advanced 1.79 percent to 11.95 yuan. Industrial & Commercial Bank of China Ltd, the nation's biggest listed lender, gained 1.10 percent to 3.66 yuan.