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China stocks drop to one-year low on US rating downgrade
By Zhang Fengming |
August 8, 2011, Monday
|
Online Edition
Online Edition
Chinese mainland market fell sharply by almost 4 percent at one-year low, tumbling with a broader Asian equity drop after the United States lost its top-notch AAA rating for the first time in history.
The benchmark Shanghai Composite Index lost 3.68 percent to 2,529.88 in the morning trading session. It's the lowest since July 2010. While the Shenzhen Component Index, which tracks the smaller market on mainland, tumbled 2.97 percent to 11,354.42 in the morning trading session.
Standard & Poor's lowered the US long-term rating by one notch to AA+ after the markets closed on August 5, with an outlook "negative."
The rating firm said there's 1 in 3 chance that the United States' credit rating could be downgraded a further notch if conditions erode over the next six to 24 months.
A sea of green was recorded in both markets in Shenzhen and Shanghai. In contrast to overseas markets in London, New York and Hong Kong, green signs mean drop on the mainland stock market, while red refers to gains.
"Panic selling dominated the domestic markets on the drops in overseas markets and the uncertainties in overseas economic conditions," said Hao Xu, an analyst from securities website lianying.com, on his blog today.
Industrial and Commercial Bank of China, the world's biggest bank in terms of market value, dropped 1.7 percent to 4.04 yuan (63 US cents).
Gold miners gained ground with gold's safe-haven status. Zhongjin Gold Corp Ltd increased 0.39 percent to 28.40 yuan. Shandong Gold-Mining Co Ltd rose to 49.60 yuan, up 1.22 percent.
The benchmark Shanghai Composite Index lost 3.68 percent to 2,529.88 in the morning trading session. It's the lowest since July 2010. While the Shenzhen Component Index, which tracks the smaller market on mainland, tumbled 2.97 percent to 11,354.42 in the morning trading session.
Standard & Poor's lowered the US long-term rating by one notch to AA+ after the markets closed on August 5, with an outlook "negative."
The rating firm said there's 1 in 3 chance that the United States' credit rating could be downgraded a further notch if conditions erode over the next six to 24 months.
A sea of green was recorded in both markets in Shenzhen and Shanghai. In contrast to overseas markets in London, New York and Hong Kong, green signs mean drop on the mainland stock market, while red refers to gains.
"Panic selling dominated the domestic markets on the drops in overseas markets and the uncertainties in overseas economic conditions," said Hao Xu, an analyst from securities website lianying.com, on his blog today.
Industrial and Commercial Bank of China, the world's biggest bank in terms of market value, dropped 1.7 percent to 4.04 yuan (63 US cents).
Gold miners gained ground with gold's safe-haven status. Zhongjin Gold Corp Ltd increased 0.39 percent to 28.40 yuan. Shandong Gold-Mining Co Ltd rose to 49.60 yuan, up 1.22 percent.
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