Key Shanghai index rebounds from 7-month low
By Pan Xiaoyi |
May 6, 2010, Thursday
|
Print Edition
Print Edition
SHANGHAI'S key stock index rebounded from a seven-month low yesterday, led by property developers and banks as investors speculated their previous losses were excessive.
The Shanghai Composite Index added 0.77 percent, or 21.87 points, to close at 2,857.15. Turnover rose to 114.1 billion yuan (US$16.8 billion) from 80.4 billion yuan on Tuesday.
The Shanghai market opened lower yesterday and dropped more than 1 percent to an intraday low of 2,770.33 following a plunge in surrounding markets on concerns that a European debt crisis may spread. But a rebound in the real estate and banking sectors reversed the losses in the afternoon.
"Lenders and property developers have already been very cheap and there was not much room for a further decline, judging from their price earnings ratio," said Guo Feng, an analyst at Northeast Securities Co.
The Bank of Communications, part-owned by HSBC Holdings Plc, gained 1.2 percent to 7.05 yuan. Shanghai Pudong Development Bank added 0.6 percent to 20.31 yuan.
Shanghai Shimao Co rose 0.75 percent to 10.80 yuan, and Shanghai Lujiazui Finance and Trade Zone jumped 2.8 percent to 19.75 yuan. Wolong Real Estate Group surged by the 10 percent daily cap to 6.20 yuan.
"The property sector will be under pressure as the government is likely to roll out more measures to rein in soaring housing prices including the possibility of a property tax," CITIC Securities Co said.
Ji Huaiyin, a State Council official, said the property tax seeks to ensure the healthy development of the housing market but the government needs to proceed gradually.
Commodity firms fell after raw material prices plunged on fears the European debt crisis could slow the global economic recovery. Jiangxi Copper, the biggest producer, dived 3.4 percent to 32.35 yuan while Aluminum Corp of China shed 2 percent to close at 11.11 yuan.
The Shanghai Composite Index added 0.77 percent, or 21.87 points, to close at 2,857.15. Turnover rose to 114.1 billion yuan (US$16.8 billion) from 80.4 billion yuan on Tuesday.
The Shanghai market opened lower yesterday and dropped more than 1 percent to an intraday low of 2,770.33 following a plunge in surrounding markets on concerns that a European debt crisis may spread. But a rebound in the real estate and banking sectors reversed the losses in the afternoon.
"Lenders and property developers have already been very cheap and there was not much room for a further decline, judging from their price earnings ratio," said Guo Feng, an analyst at Northeast Securities Co.
The Bank of Communications, part-owned by HSBC Holdings Plc, gained 1.2 percent to 7.05 yuan. Shanghai Pudong Development Bank added 0.6 percent to 20.31 yuan.
Shanghai Shimao Co rose 0.75 percent to 10.80 yuan, and Shanghai Lujiazui Finance and Trade Zone jumped 2.8 percent to 19.75 yuan. Wolong Real Estate Group surged by the 10 percent daily cap to 6.20 yuan.
"The property sector will be under pressure as the government is likely to roll out more measures to rein in soaring housing prices including the possibility of a property tax," CITIC Securities Co said.
Ji Huaiyin, a State Council official, said the property tax seeks to ensure the healthy development of the housing market but the government needs to proceed gradually.
Commodity firms fell after raw material prices plunged on fears the European debt crisis could slow the global economic recovery. Jiangxi Copper, the biggest producer, dived 3.4 percent to 32.35 yuan while Aluminum Corp of China shed 2 percent to close at 11.11 yuan.
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