Asian markets sell-off and funding worries dent Shanghai’s key index
Print Edition
Shanghai shares fell yesterday following declines in Asian markets while concerns about a liquidity crunch reignited after lending costs rose to a more than two-week high.
Everbright Securities, which was blamed for the dramatic swing on the Shanghai stock market last week, dived by the daily limit of 10 percent as investors sold its shares on market opening.
The Shanghai Composite Index lost 0.62 percent to close at 2,072.59 points.
Asian markets slumped, with Japan’s Nikkei ending at a two-month low, Hong Kong’s Hang Seng Index off 2.2 percent while Indonesia’s Jakarta Composite shed 4.5 percent.
“The wide sell-off across Asia sparked concerns that international capital is flowing out of emerging markets,” said Shenyin and Wanguo Securities.
China Shenhua Energy Co, the nation’s biggest coal producer, lost 1.4 percent to 16.48 yuan. Shanxi Lu’an Environmental Energy Development Co slumped 3.5 percent to 13.09 yuan (US$2.15).
Investors were also worried about higher lending costs after the seven-day repurchase rate, a gauge of funding availability in the banking system, rose 33.6 basis points to 4.43 percent in Shanghai, the highest level since August 1, according to the National Interbank Funding Center.
Everbright plunged to 10.91 yuan as soon as trading of its shares resumed yesterday. Trading of the brokerage’s stock had been suspended since Friday when a glitch in the company’s trading system triggered a spate of buy orders that sent the benchmark composite index up 5.9 percent in two minutes.
The decline wiped out 4.1 billion yuan off the brokerage’s market capitalization.
Everbright suffered a loss of 194 million yuan on Friday, which accounted for 15 percent of its operating profit last year, as a result of chalking the erroneous transactions of 7.27 billion yuan.
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