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August 11, 2009

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Home » Business » Finance

Key barometer posts longest losing streak

SHANGHAI'S key stock index dropped for a fourth trading day yesterday, sending the barometer to its longest losing streak this year, on fears banks will control inflows to the stock market to avert asset price bubbles.

The Shanghai Composite Index dipped 0.34 percent, or 10.93 points, to close at 3,249.76, extending the biggest weekly loss since February. Turnover shrank to 153.09 billion yuan (US$22.51 billion) from 185 billion yuan last Friday. Gainers outnumbered losers 548 to 306 and 14 stocks were unchanged.

"Despite the continued loose monetary policy, the tightened controls on bank loans and capital flows to the stock market and the property market have fanned speculation that liquidity will dry up," said Wen Lijun, an analyst at Nanjing Securities Co.

Wen said that a shrinking turnover reflected bleak investor sentiment and the market is expected to keep fluctuating. Commercial banks have acted to rein in loans in the second half of the year to avoid possible asset bubbles and surging bad debt. China Construction Bank said last week it will reduce new loans by 70 percent between July and December. Banks and real estate developers led the losses in trading yesterday.

Shanghai Pudong Development Bank Co retreated 1.77 percent to 24.43 yuan, the Industrial and Commercial Bank of China, the nation's biggest lender, dipped 0.2 percent to 5.08 yuan, China Construction Bank dropped 1.96 percent to 5.99 yuan and the Bank of China shed 0.91 percent to 4.34 yuan.

Poly Real Estate Group Co, the nation's second-largest developer by market value, lost 2.5 percent to 25.76 yuan while Gemdale Corp slid 3.15 percent to 16.28 yuan. Shanghai-based Shimao Co shed 1.44 percent to 15.98 yuan.

Copper producers increased on higher copper futures. Aluminum Corporation of China, the nation's biggest maker of the lightweight metal, added 3.55 percent to 18.1 yuan and Yunnan Copper gained 4.86 percent to close at 33.87 yuan.


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