Index falls the most in over 2 months
By Lydia Chen |
May 5, 2011, Thursday
|
Print Edition
Print Edition
SHARES in Shanghai tumbled the most in more than two months on fresh concerns over inflation while cyclical sectors saw acute losses.
The Shanghai Composite Index fell 2.3 percent, the biggest daily drop since February 22, to end at 2,866.02.
Yanzhou Coal Mining Co, China's fourth-biggest coal producer, lost 7.1 percent to 33.14 yuan (US$5.10), after Goldman Sachs Group Inc said the government may cap thermal coal prices to help power producers.
"There is little room left for coal prices to continue the rally after hitting a record," said Liu Jun, deputy index investment officer at Huatai-Pinebridge Fund Management Co.
Other cyclical sectors such as oil and metals producers also declined as precious metals and crude oil prices declined while the US dollar rebounded from a nearly three-year low.
PetroChina slid 2.2 percent to 11.46 yuan. Zhongjin Gold Co shed 4.3 percent to 34.60 yuan.
The greenback's future direction is key as it can affect the prices of cyclical shares, whose performance is critical to whether the market is likely to see any momentum soon, Liu said.
"If the dollar changes its weak trend, then cyclical shares may see a new round of price corrections," he added.
Banks performed weakly after investors focused on the central bank's latest pledge that it would continue to use multiple monetary tightening measures to curb high inflation.
The Shanghai Composite Index fell 2.3 percent, the biggest daily drop since February 22, to end at 2,866.02.
Yanzhou Coal Mining Co, China's fourth-biggest coal producer, lost 7.1 percent to 33.14 yuan (US$5.10), after Goldman Sachs Group Inc said the government may cap thermal coal prices to help power producers.
"There is little room left for coal prices to continue the rally after hitting a record," said Liu Jun, deputy index investment officer at Huatai-Pinebridge Fund Management Co.
Other cyclical sectors such as oil and metals producers also declined as precious metals and crude oil prices declined while the US dollar rebounded from a nearly three-year low.
PetroChina slid 2.2 percent to 11.46 yuan. Zhongjin Gold Co shed 4.3 percent to 34.60 yuan.
The greenback's future direction is key as it can affect the prices of cyclical shares, whose performance is critical to whether the market is likely to see any momentum soon, Liu said.
"If the dollar changes its weak trend, then cyclical shares may see a new round of price corrections," he added.
Banks performed weakly after investors focused on the central bank's latest pledge that it would continue to use multiple monetary tightening measures to curb high inflation.
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