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Index falls as investors take profit after 7% gain
By Hu Xiaocen |
February 20, 2013, Wednesday
|
Print Edition
Print Edition
SHANGHAI stocks fell the most in five weeks yesterday as investors took profits after the key index gained about 7 percent so far this year, with property firms and building material producers among the biggest decliners.
The Shanghai Composite Index shed 1.6 percent to 2,382.91 points, the biggest loss since January 11.
Soochow Securities said investors sold amid a stock rally which had seen the key index gain 7.2 percent before the start of the Spring Festival this year. It has since fallen after the market re-opened on Monday.
Property developers and cement producers tumbled over worries of a further tightening of the real estate market, which may include a cut in the housing provident fund quota, rise in borrowing cost for second-home buyers, and extension of a property tax pilot program.
Poly Real Estate Group Co, China's second-biggest listed property developer, slumped 5.1 percent to 12.22 yuan (US$1.96). Shanghai Lujiazui Finance and Trade Zone Development Co tumbled 4.5 percent to 11.93 yuan. Anhui Conch Cement Co, China's biggest cement firm, sank 7.6 percent to 19.72 yuan.
Banks also fell after the People's Bank of China drained liquidity from the interbank market yesterday.
"It's a hawkish signal that the central bank does not want money market conditions to get too easy," Dariusz Kowalczyk, senior economist at Credit Agricole in Hong Kong, said in a note.
The Industrial and Commercial Bank of China, the nation's biggest, shed 1.2 percent to 4.26 yuan. China Construction Bank, the second-biggest lender, fell 0.8 percent to 4.84 yuan. Shanghai Pudong Development Bank lost 1.4 percent to 11.1 yuan.
The Shanghai Composite Index shed 1.6 percent to 2,382.91 points, the biggest loss since January 11.
Soochow Securities said investors sold amid a stock rally which had seen the key index gain 7.2 percent before the start of the Spring Festival this year. It has since fallen after the market re-opened on Monday.
Property developers and cement producers tumbled over worries of a further tightening of the real estate market, which may include a cut in the housing provident fund quota, rise in borrowing cost for second-home buyers, and extension of a property tax pilot program.
Poly Real Estate Group Co, China's second-biggest listed property developer, slumped 5.1 percent to 12.22 yuan (US$1.96). Shanghai Lujiazui Finance and Trade Zone Development Co tumbled 4.5 percent to 11.93 yuan. Anhui Conch Cement Co, China's biggest cement firm, sank 7.6 percent to 19.72 yuan.
Banks also fell after the People's Bank of China drained liquidity from the interbank market yesterday.
"It's a hawkish signal that the central bank does not want money market conditions to get too easy," Dariusz Kowalczyk, senior economist at Credit Agricole in Hong Kong, said in a note.
The Industrial and Commercial Bank of China, the nation's biggest, shed 1.2 percent to 4.26 yuan. China Construction Bank, the second-biggest lender, fell 0.8 percent to 4.84 yuan. Shanghai Pudong Development Bank lost 1.4 percent to 11.1 yuan.
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