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City index below 2,000-point mark, nearly a 6-month low
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Shanghai stocks tumbled today, sending the key index below the 2,000-point level, as money costs rose and concern about a glut of new shares intensified ahead of initial public offerings of eight companies tomorrow.
The benchmark Shanghai Composite Index lost 0.68 percent, or 13.70 points, to 1,991.25, the lowest since July 31. Daily turnover shrank to 48.3 billion yuan (US$7.9 billion).
“Money costs are expected to pick up ahead of the Spring Festival holiday while a flood of IPOs also increased demand for funds,” said Luo Chunpeng, analyst at Qilu Securities.
Data from the National Interbank Funding Center showed the seven-day Shanghai Interbank Offered Rate, a gauge of funding costs, added 155.30 points to 6.33 percent, as the central bank refrained from liquidity injection for three weeks.
Eight companies will float their shares tomorrow, including three on Shenzhen Stock Exchange’s small and midsize enterprise board and five on ChiNext board.
The market slide also came after data from the National Statistics Bureau showed that China’s economy expanded 7.7 percent in the fourth quarter. For the whole year of 2013, the economy grew by 7.7 percent, beating the official target of 7.5 percent.
Fixed-asset investment increased 19.6 percent year-on-year in 2013, slowing from 19.9 percent in the first eleven months of the year. Industrial output grew 9.7 percent last month, moderating from 10 percent in November.
“The data reinforced our view that growth is in a downtrend and we continue to expect economic growth to slow to 7.5 percent in the first quarter and 7.1 percent in the second quarter,” said Zhang Zhiwei, chief China economist with Nomura Holdings Inc.
Oil stocks dragged the market down. China Oilfield Services Ltd dropped 4.2 percent to 21.38 yuan. PetroChina Co Ltd lost 1.5 percent to 7.63 yuan.
Neway Valve (Suzhou) Co, the first company traded publicly after the reboot of IPOs, plunged by the daily limit of 10 percent to 22.81 yuan after surging over 43 percent on its debut on Friday.
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