Fears of tighter policy send key index lower
By Feng Jianmin and Joyce Pan |
November 4, 2010, Thursday
|
Print Edition
Print Edition
SHANGHAI'S key stock index ended lower on concerns that China may unveil a tighter monetary policy to tame growing pressure of imported inflation if the US dollar continues to weaken.
The Shanghai Composite Index dipped 0.47 percent, or 14.45 points, to close at 3,030.99. Turnover was 244 billion yuan (US$ 36 billion).
Commodity prices rose overnight Tuesday as the dollar weakened in anticipation that the United States Federal Reserve may soon implement a quantitative easing plan. Cotton futures in New York rose to a record overnight Tuesday while sugar was at a 29-year high. Oil prices also ended at six-month highs, above US$84 a barrel.
"While the market awaited the results of Congressional elections and loosening measures, expectations over a tighter grasp on domestic liquidity were mounting and weighed on the stock market," GF Securities Co wrote.
The People's Bank of China, the central bank, said yesterday that an economic stimulus plan may end once the economy starts to pick up. Its announcement sparked investor fears over possible new tightening measures.
China raised its interest rates on October 20 - the first increase since the end of 2007.
Metal producers led losses on media reports the Ministry of Commerce will reduce export quotas of rare metals such as tin and rare earth.
Minmetals Development Co tumbled 9.7 percent to 33.19 yuan, and Aluminum Corp of China slumped 6.8 percent to 12.39 yuan.
Kweichow Moutai Co, a liquor maker in China, gained 0.4 percent to 163.35 yuan.
The Shanghai Composite Index dipped 0.47 percent, or 14.45 points, to close at 3,030.99. Turnover was 244 billion yuan (US$ 36 billion).
Commodity prices rose overnight Tuesday as the dollar weakened in anticipation that the United States Federal Reserve may soon implement a quantitative easing plan. Cotton futures in New York rose to a record overnight Tuesday while sugar was at a 29-year high. Oil prices also ended at six-month highs, above US$84 a barrel.
"While the market awaited the results of Congressional elections and loosening measures, expectations over a tighter grasp on domestic liquidity were mounting and weighed on the stock market," GF Securities Co wrote.
The People's Bank of China, the central bank, said yesterday that an economic stimulus plan may end once the economy starts to pick up. Its announcement sparked investor fears over possible new tightening measures.
China raised its interest rates on October 20 - the first increase since the end of 2007.
Metal producers led losses on media reports the Ministry of Commerce will reduce export quotas of rare metals such as tin and rare earth.
Minmetals Development Co tumbled 9.7 percent to 33.19 yuan, and Aluminum Corp of China slumped 6.8 percent to 12.39 yuan.
Kweichow Moutai Co, a liquor maker in China, gained 0.4 percent to 163.35 yuan.
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