Index slumps, ends at 8-week low
By Lilith Hu |
June 5, 2012, Tuesday
|
Print Edition
Print Edition
SHANGHAI stocks yesterday fell the most in six months to their lowest level in almost eight weeks on continued slow pace of growth in China's non-manufacturing sector and amid liquidity concerns after reports of the launch the international board.
The Shanghai Composite Index plunged 2.73 percent, the biggest drop since November 30 when the benchmark lost 3.3 percent, to 2,308.55 points. It was the lowest closing level since April 10, when the index settled at 2,305.86.
"Investors were spooked amid reports the government may accelerate the launch of the international board, which may cause a liquidity drain in the stock market," said Hu Xiaohui, chief strategist at Datong Securities. "Investors shouldn't be too worried about the move, because the board weighs a minor proportion on the market and is a necessary tool to accelerate the process of the yuan's internationalization, which will benefit the capital market in the long run."
The China Securities Regulatory Commission is studying the plan for introducing the international board, where foreign companies can list yuan-denominated shares on the Shanghai bourse. However, there's no timetable for the launch yet, the securities watchdog said yesterday.
Brokerages tumbled yesterday. Haitong Securities Co plunged 4.1 percent to 10.19 yuan (US$1.61). Industrial Securities Co tumbled 5.1 percent to close at 11.44 yuan.
China's non-manufacturing activities in May posted their slowest expansion this year. The service Purchasing Managers' Index fell to 55.2 in May from April's 56.1, the National Statistics Bureau and the China Federation of Logistics and Purchasing said on Sunday.
"Domestic investors were also jittery about the US market as job data weakened," Hu said.
The US unemployment rate rose to 8.2 percent in May, from 8.1 percent the previous month, while payrolls increased less than the most-pessimistic forecast, data suggested.
The Shanghai Composite Index plunged 2.73 percent, the biggest drop since November 30 when the benchmark lost 3.3 percent, to 2,308.55 points. It was the lowest closing level since April 10, when the index settled at 2,305.86.
"Investors were spooked amid reports the government may accelerate the launch of the international board, which may cause a liquidity drain in the stock market," said Hu Xiaohui, chief strategist at Datong Securities. "Investors shouldn't be too worried about the move, because the board weighs a minor proportion on the market and is a necessary tool to accelerate the process of the yuan's internationalization, which will benefit the capital market in the long run."
The China Securities Regulatory Commission is studying the plan for introducing the international board, where foreign companies can list yuan-denominated shares on the Shanghai bourse. However, there's no timetable for the launch yet, the securities watchdog said yesterday.
Brokerages tumbled yesterday. Haitong Securities Co plunged 4.1 percent to 10.19 yuan (US$1.61). Industrial Securities Co tumbled 5.1 percent to close at 11.44 yuan.
China's non-manufacturing activities in May posted their slowest expansion this year. The service Purchasing Managers' Index fell to 55.2 in May from April's 56.1, the National Statistics Bureau and the China Federation of Logistics and Purchasing said on Sunday.
"Domestic investors were also jittery about the US market as job data weakened," Hu said.
The US unemployment rate rose to 8.2 percent in May, from 8.1 percent the previous month, while payrolls increased less than the most-pessimistic forecast, data suggested.
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