Key Shanghai stock index tumbles over 6%

By Pan Xiaoyi  |   2008-11-19  |     NEWSPAPER EDITION

SHANGHAI'S key stock index tumbled more than 6 percent yesterday and breached the psychologically important 2,000 level again amid profit taking.

A total of 679.8 billion yuan (US$99.97 billion) was wiped off the market's value from the previous day's trading. Nearly 850 shares on the Shanghai and Shenzhen markets fell by the daily limit.

The benchmark Shanghai Composite Index almost reversed last week's gains and tumbled 6.31 percent, or 128.05 points, to close at 1902.43 points, after reaching an intraday low of 1,889.87. The key Shanghai index has fallen by more than 60 percent from its highest point in October last year.

Losers outnumbered gainers 819 to 53. Turnover in the local market rose to 103.7 billion yuan, compared with 92.4 billion yuan on Monday.

The Shenzhen Composite Index, which tracks the smaller domestic market, lost 6.85 percent, or 38.63 points, to 524.96 points. Turnover there totaled 43.6 billion yuan.

The plunge followed the retreats in overseas markets amid widespread concerns of a looming recession.

Wall Street shares ended lower overnight after Citigroup announced another cut of 52,000 positions, which added to the bleak economic outlook. In Tokyo, the Nikkei 225 dropped as data showed on Monday that the Japanese economy has entered its first recession in seven years.

"Excessively rapid rallies of shares lacked the concrete support of better corporate business performance," GF Securities Co wrote in a note. "Medium and low-priced shares rebounded faster than blue chips, which is more of a speculation. The correction consolidated the index as shares were pushed to a more reasonable value."