Index falls on fears over inflation moves
By Feng Jianmin |
June 18, 2011, Saturday
|
Print Edition
Print Edition
SHANGHAI stocks yesterday fell on concern the central bank will take more steps to cool inflation.
The benchmark Shanghai Composite Index lost 0.8 percent to 2,642.82, the lowest since September 29.
The index dropped 2.3 percent this week, after the central bank announced it will raise lenders' reserve requirement ratio for the sixth time this year as data showed inflation in May was the fastest in 34 months.
"Weaker-than-expected economic data in the United States and concerns about another interest rate hike in China led the market down this week," China Natural Assets Management Co wrote in a note. "China's economic slowdown has been minor and controllable."
The note said an interest rate hike is possible in the short term and the market will linger at the bottom level.
Metal producers were weak as copper has fallen back to US$9,000 per ton under pressure from a stronger US dollar and general uncertainty. Jiangxi Copper Co fell 1.3 percent to 32.54 yuan.
Aluminum Corp of China lost 6 percent to 10.60 yuan, the most since November 12.
"The base metals have come under fairly heavy pressure with mounting concerns over the potential for a Greek default," the South Africa-based Standard Bank said in a note. "But we do expect to see increased imports of refined metals in June and July as participants anticipate a further recovery in Chinese demand in the second half."
The benchmark Shanghai Composite Index lost 0.8 percent to 2,642.82, the lowest since September 29.
The index dropped 2.3 percent this week, after the central bank announced it will raise lenders' reserve requirement ratio for the sixth time this year as data showed inflation in May was the fastest in 34 months.
"Weaker-than-expected economic data in the United States and concerns about another interest rate hike in China led the market down this week," China Natural Assets Management Co wrote in a note. "China's economic slowdown has been minor and controllable."
The note said an interest rate hike is possible in the short term and the market will linger at the bottom level.
Metal producers were weak as copper has fallen back to US$9,000 per ton under pressure from a stronger US dollar and general uncertainty. Jiangxi Copper Co fell 1.3 percent to 32.54 yuan.
Aluminum Corp of China lost 6 percent to 10.60 yuan, the most since November 12.
"The base metals have come under fairly heavy pressure with mounting concerns over the potential for a Greek default," the South Africa-based Standard Bank said in a note. "But we do expect to see increased imports of refined metals in June and July as participants anticipate a further recovery in Chinese demand in the second half."
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