Shanghai shares drop sharply at midday

By Leo Zhang  |   2008-11-21  |     ONLINE EDITION

CHINA'S main stock indexes dropped sharply this morning, taking cues from stumbles on Wall Street and markets in Asia on worries that a global recession may hurt the country badly.

The Shanghai Composite Index lost 84.95 points, or 4.28 percent, to close the morning session at 1,898.81. The Shenzhen Component Index retreated 4.35 percent to 6,405.53.

Baoshan Iron & Steel Co, the country's biggest steel maker, tumbled 5.10 percent to 4.84 yuan. The company is planning to slash product prices by about 20 percent due to weaker demand.

Haitong Securities Co plunged the 10 percent daily cap to 11.98 yuan after seven institutional investors were allowed today to dispose of their previously-locked shares, adding pressure on liquidity.

China's equity indexes fared better this month than its international counterparts largely thanks to the announcement of the government's 4-trillion yuan fiscal stimulus package.

But analysts said the domestic market faces uncertainties and downward pressure as major economies show signs of recession, threatening to dent China's exports and damp corporate earnings.