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Index ends lowest in 14 months
By Lydia Chen |
September 20, 2011, Tuesday
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Print Edition
Print Edition
SHANGHAI'S key stock index posted the biggest drop in seven trading days and closed at the lowest in 14 months yesterday, with cyclical stocks leading a decline across the board on fears of tightening money supply.
The Shanghai Composite Index lost 1.8 percent to 2,437.8 points, the lowest since July 16, 2010.
Investors were spooked by fears of monetary tightening after India raised interest rates for the 12th time in the last 18 months last Friday to tame inflation.
"Investors are worried that other emerging markets, including China, may follow India's move to continue their monetary tightening," said Zhou Xuesong, an analyst with Citic Securities.
China hasn't raised interest rates or bank reserve requirement ratio since July. Inflation in the second-largest economy was 6.2 percent from a year ago in August.
The market is likely to be sluggish this week as investors anticipate a rise in money market rates due to the upcoming cash calls ahead of a week-long National Day holiday from October 1 to 7.
China Minsheng Banking Corp tumbled 2.2 percent to 5.69 yuan (89 US cents). The Bank of Communications lost 1.9 percent to 4.54 yuan.
China Coal Energy Co led the fall among coal miners after its parent was told to halt operations in Shanxi Province after 10 miners drowned in a flooding in the pit last Friday. The unit of China National Coal Group Corp fell 5.9 percent to 9.02 yuan.
The Shanghai Composite Index lost 1.8 percent to 2,437.8 points, the lowest since July 16, 2010.
Investors were spooked by fears of monetary tightening after India raised interest rates for the 12th time in the last 18 months last Friday to tame inflation.
"Investors are worried that other emerging markets, including China, may follow India's move to continue their monetary tightening," said Zhou Xuesong, an analyst with Citic Securities.
China hasn't raised interest rates or bank reserve requirement ratio since July. Inflation in the second-largest economy was 6.2 percent from a year ago in August.
The market is likely to be sluggish this week as investors anticipate a rise in money market rates due to the upcoming cash calls ahead of a week-long National Day holiday from October 1 to 7.
China Minsheng Banking Corp tumbled 2.2 percent to 5.69 yuan (89 US cents). The Bank of Communications lost 1.9 percent to 4.54 yuan.
China Coal Energy Co led the fall among coal miners after its parent was told to halt operations in Shanxi Province after 10 miners drowned in a flooding in the pit last Friday. The unit of China National Coal Group Corp fell 5.9 percent to 9.02 yuan.
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