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Europe and IMF upset the market
By Feng Jianmin |
November 17, 2011, Thursday
|
Print Edition
Print Edition
Shanghai's stock market yesterday fell by the most in eight weeks after the International Monetary Fund expressed concerns about China's financial system and on fears that the worsening economy in Europe may hit Chinese exports.
The Shanghai Composite Index lost 2.5 percent to 2,466.96 points, the largest daily loss since September 22.
The IMF urged China on Tuesday to reform its financial system to withstand systemic risks.
Jonathan Fiechter, deputy director of the IMF's monetary and capital markets department, said: "Although China's banks are healthy, Chinese authorities need to address some vulnerabilities, such as capital misallocation and the formation of bubbles, especially in real estate."
Meanwhile, worries about the European debt crisis picked up after the yields on several European government bonds jumped beyond the alarm level of 7 percent.
The outlook for China's exports over the next few months and in the first quarter of next year is "not optimistic," Shen Danyang, spokesman for the Ministry of Commerce, said yesterday, citing "uncertainties" in the external environment, cooling demand from Western economies and rising costs for Chinese exporters.
Tang Yonggang, a senior analyst at Datong Securities, said negative comments about China's economy have hurt market sentiment.
"The market is also under pressure from profit-taking after four straight days of growth," he added. "The fall was beyond expectations. The market may remain weak if there is no significant rebound Thursday."
Banks led the losers. The Bank of China fell 1.7 percent to 2.95 yuan (47 US cents). The Industrial and Commercial Bank of China lost 0.9 percent to 4.28 yuan.
Property developers declined after China Securities Journal said Chinese developers had borrowed more than 1 trillion yuan since the second half of last year at high interest rates.
The Shanghai Composite Index lost 2.5 percent to 2,466.96 points, the largest daily loss since September 22.
The IMF urged China on Tuesday to reform its financial system to withstand systemic risks.
Jonathan Fiechter, deputy director of the IMF's monetary and capital markets department, said: "Although China's banks are healthy, Chinese authorities need to address some vulnerabilities, such as capital misallocation and the formation of bubbles, especially in real estate."
Meanwhile, worries about the European debt crisis picked up after the yields on several European government bonds jumped beyond the alarm level of 7 percent.
The outlook for China's exports over the next few months and in the first quarter of next year is "not optimistic," Shen Danyang, spokesman for the Ministry of Commerce, said yesterday, citing "uncertainties" in the external environment, cooling demand from Western economies and rising costs for Chinese exporters.
Tang Yonggang, a senior analyst at Datong Securities, said negative comments about China's economy have hurt market sentiment.
"The market is also under pressure from profit-taking after four straight days of growth," he added. "The fall was beyond expectations. The market may remain weak if there is no significant rebound Thursday."
Banks led the losers. The Bank of China fell 1.7 percent to 2.95 yuan (47 US cents). The Industrial and Commercial Bank of China lost 0.9 percent to 4.28 yuan.
Property developers declined after China Securities Journal said Chinese developers had borrowed more than 1 trillion yuan since the second half of last year at high interest rates.
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