Key index declines the most in 10 days
By Staff Reporter |
August 19, 2011, Friday
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Print Edition
Print Edition
SHANGHAI'S key stock index fell the most in 10 days, amid concerns that the central government may unveil more measures to tighten liquidity and the property market.
The Shanghai Composite Index fell 1.6 percent to 2,559.47 points, the most since August 8.
The People's Bank of China auctioned off 7 billion yuan of three-year bills and resumed issuing 1 billion yuan worth of three-year bills after a four-week suspension. The central bank raised the yields for both notes by more than 8 basis points, leading analysts to suspect that as a sign of potential new measures to control liquidity, such as raising interest rates or reserve requirement ratio.
"Blue chips led the index lower on concerns over rising yields of central bank notes and technical pressure," said Cao Xuefeng, an analyst with Huaxi Securities. "The market is likely to fall over the short term."
Property developers sagged on concerns about more tightening measures after only 14 of 70 major cities in China reported a drop in home prices last month from June, compared with 12 in a June survey, the National Bureau of Statistics said yesterday.
"Restrictions on purchasing are taking effect, and we expect the curbs to be expanded to smaller cities," said Su Xuejing, an analyst at Changjiang Securities,
China's housing authority has detailed five conditions, including being leading gainers in home prices, to help local governments evaluate if they should introduce restrictions on house purchases.
Poly Real Estate Group Co, China's second-largest developer by market value, fell 4.4 percent to 10.56 yuan.
The Shanghai Composite Index fell 1.6 percent to 2,559.47 points, the most since August 8.
The People's Bank of China auctioned off 7 billion yuan of three-year bills and resumed issuing 1 billion yuan worth of three-year bills after a four-week suspension. The central bank raised the yields for both notes by more than 8 basis points, leading analysts to suspect that as a sign of potential new measures to control liquidity, such as raising interest rates or reserve requirement ratio.
"Blue chips led the index lower on concerns over rising yields of central bank notes and technical pressure," said Cao Xuefeng, an analyst with Huaxi Securities. "The market is likely to fall over the short term."
Property developers sagged on concerns about more tightening measures after only 14 of 70 major cities in China reported a drop in home prices last month from June, compared with 12 in a June survey, the National Bureau of Statistics said yesterday.
"Restrictions on purchasing are taking effect, and we expect the curbs to be expanded to smaller cities," said Su Xuejing, an analyst at Changjiang Securities,
China's housing authority has detailed five conditions, including being leading gainers in home prices, to help local governments evaluate if they should introduce restrictions on house purchases.
Poly Real Estate Group Co, China's second-largest developer by market value, fell 4.4 percent to 10.56 yuan.
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