Index falls on worries over tight liquidity
By Feng Jianmin |
September 3, 2011, Saturday
|
Print Edition
Print Edition
Shanghai's key stock index yesterday fell, capping its biggest weekly loss in three months, on concerns that monetary policies will remain tight despite a possible easing in inflationary pressure in August.
The Shanghai Composite Index fell 1.1 percent to 2,528.28 points. The index was down 3.2 percent this week on concerns over tight liquidity after the central bank included margin deposits into banks' reserves.
The China Securities Journal said in an editorial yesterday that inflation is unlikely to hit a new peak, but monetary policies will remain tight and curbing prices is still a top priority for the government.
Analysts from firms, including BOCOM International and China International Capital Corp, estimated that the Consumer Price Index for August will rise between 6 percent and 6.3 percent, compared with 6.5 percent in July, a 37-month high.
"Actual inflation is still severe as prices for edible oil and pork continue to rise," said Zhang Xufeng, an analyst at the China Nature Asset Management Co.
"Policies will only ease after inflation eases for several consecutive months, and we do not expect that to happen in the third quarter."
Property developers extended previous losses after new housing sales in Beijing dropped to the lowest in three years while Shanghai home sales went through the worst August in seven years.
Poly Real Estate Group Co, China's second-largest developer by market value, fell 3.4 percent to 10.66 yuan (US$1.67).
Gemdale Corp, the fourth-biggest developer, slid 1.3 percent to 6.04 yuan.
The Shanghai Composite Index fell 1.1 percent to 2,528.28 points. The index was down 3.2 percent this week on concerns over tight liquidity after the central bank included margin deposits into banks' reserves.
The China Securities Journal said in an editorial yesterday that inflation is unlikely to hit a new peak, but monetary policies will remain tight and curbing prices is still a top priority for the government.
Analysts from firms, including BOCOM International and China International Capital Corp, estimated that the Consumer Price Index for August will rise between 6 percent and 6.3 percent, compared with 6.5 percent in July, a 37-month high.
"Actual inflation is still severe as prices for edible oil and pork continue to rise," said Zhang Xufeng, an analyst at the China Nature Asset Management Co.
"Policies will only ease after inflation eases for several consecutive months, and we do not expect that to happen in the third quarter."
Property developers extended previous losses after new housing sales in Beijing dropped to the lowest in three years while Shanghai home sales went through the worst August in seven years.
Poly Real Estate Group Co, China's second-largest developer by market value, fell 3.4 percent to 10.66 yuan (US$1.67).
Gemdale Corp, the fourth-biggest developer, slid 1.3 percent to 6.04 yuan.
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