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Index drops as mining sector hit
By Feng Jianmin |
October 19, 2010, Tuesday
|
Print Edition
Print Edition
SHANGHAI'S stocks fell for the first time in eight trading days, led by gold and metal miners as commodity prices retreated from previous highs on a stronger US dollar. Steel makers gained.
The benchmark Shanghai Composite Index dipped 0.5 percent, or 16 points, to close at 2,955.2. Turnover grew to 301.2 billion yuan (US$28.5 billion) from last Friday's 273 billion yuan.
Gold and copper miners led the decliners as prices of both metals on world exchanges dropped on speculation that the US Federal Reserve may dole out quantitative easing in smaller chunks. Quantitative easing means printing more money to buy assets.
Zijin Mining Group Co, China's largest bullion producer, yesterday said it was being sued for 19.5 million yuan after a tailings dam at one of its tin mines collapsed in Guangdong Province in September. Its shares lost 7.8 percent to 9.47 yuan. Zhongjin Gold Co shed 9.1 percent to 42.35 yuan. Shandong Gold Mining Co dropped 9 percent to 58.51 yuan. Jiangxi Copper Co, the country's biggest producer of the metal, shed 5.89 percent to 40.58 yuan.
"Investors are shifting interest from the already high-priced resource shares to those lagging gains in the broader market, such as the iron and steel sector," said an analyst with Changjiang Securities who declined to be named. "The steel industry is getting healthier as stock piles have been declining since May."
The gains made by steel producers came after BHP and Rio Tinto, the world's second- and third-largest iron ore miners, yesterday said they walked away from plans to form the world's largest iron ore exporter, following opposition from regulators in Europe and Asia. Steel makers feared higher prices if the two companies merged iron ore production.
Inner Mongolian Baotou Steel Union jumped the 10 percent daily limit to 3.91 yuan.
The benchmark Shanghai Composite Index dipped 0.5 percent, or 16 points, to close at 2,955.2. Turnover grew to 301.2 billion yuan (US$28.5 billion) from last Friday's 273 billion yuan.
Gold and copper miners led the decliners as prices of both metals on world exchanges dropped on speculation that the US Federal Reserve may dole out quantitative easing in smaller chunks. Quantitative easing means printing more money to buy assets.
Zijin Mining Group Co, China's largest bullion producer, yesterday said it was being sued for 19.5 million yuan after a tailings dam at one of its tin mines collapsed in Guangdong Province in September. Its shares lost 7.8 percent to 9.47 yuan. Zhongjin Gold Co shed 9.1 percent to 42.35 yuan. Shandong Gold Mining Co dropped 9 percent to 58.51 yuan. Jiangxi Copper Co, the country's biggest producer of the metal, shed 5.89 percent to 40.58 yuan.
"Investors are shifting interest from the already high-priced resource shares to those lagging gains in the broader market, such as the iron and steel sector," said an analyst with Changjiang Securities who declined to be named. "The steel industry is getting healthier as stock piles have been declining since May."
The gains made by steel producers came after BHP and Rio Tinto, the world's second- and third-largest iron ore miners, yesterday said they walked away from plans to form the world's largest iron ore exporter, following opposition from regulators in Europe and Asia. Steel makers feared higher prices if the two companies merged iron ore production.
Inner Mongolian Baotou Steel Union jumped the 10 percent daily limit to 3.91 yuan.
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