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Market drops to 7-month low after money-freezing order
By Wang Yanlin |
May 4, 2010, Tuesday
|
Online Edition
Online Edition
SHANGHAI'S key stock index lost more than 1 percent today to the lowest level in seven months, after China asked banks to freeze more money to curb asset bubble and prevent economic overheating.
The benchmark Shanghai Composite Index tumbled 1.23 percent, or 35.33 points, to close at 2,835.28 today -- the first trading day after the Labor Day holiday. It touched an intraday high of 2,865.55 and once fell to the low of 2,809.13.
Losers outnumbered gainers 502 to 329 while 37 remained unchanged. Turnover contracted to 80.4 billion yuan (US$11.7 billion) from last Friday's 105.9 billion yuan.
The Shenzhen Component Index, which tracks the smaller domestic bourse, also shed 1.81 percent, or 201.77 points, to end at 10,960.77.
The People's Bank of China, the central bank, announced on Sunday to raise the reserve requirement ratio -- the share of deposits a bank must set aside as reserves -- by 0.5 percentage point on yuan deposits starting next Monday.
This reserve requirement increase can freeze nearly 400 billion yuan of credit and it has been the third time this year for China to increase the reserve rate.
Under its influence, shares of property developers led the decline today, because the tightening credit may restrict their funding sources. Jiabao Industry and Commerce Co Ltd, Huayuan Real Estate Co Ltd, Beijing Urban Construction Co Ltd and Gree Real Estate Co Ltd all lost by the daily trading limit of 10 percent. China Vanke Co, the country's largest listed property developer, decreased 4.49 percent to 7.45 yuan today.
The benchmark Shanghai Composite Index tumbled 1.23 percent, or 35.33 points, to close at 2,835.28 today -- the first trading day after the Labor Day holiday. It touched an intraday high of 2,865.55 and once fell to the low of 2,809.13.
Losers outnumbered gainers 502 to 329 while 37 remained unchanged. Turnover contracted to 80.4 billion yuan (US$11.7 billion) from last Friday's 105.9 billion yuan.
The Shenzhen Component Index, which tracks the smaller domestic bourse, also shed 1.81 percent, or 201.77 points, to end at 10,960.77.
The People's Bank of China, the central bank, announced on Sunday to raise the reserve requirement ratio -- the share of deposits a bank must set aside as reserves -- by 0.5 percentage point on yuan deposits starting next Monday.
This reserve requirement increase can freeze nearly 400 billion yuan of credit and it has been the third time this year for China to increase the reserve rate.
Under its influence, shares of property developers led the decline today, because the tightening credit may restrict their funding sources. Jiabao Industry and Commerce Co Ltd, Huayuan Real Estate Co Ltd, Beijing Urban Construction Co Ltd and Gree Real Estate Co Ltd all lost by the daily trading limit of 10 percent. China Vanke Co, the country's largest listed property developer, decreased 4.49 percent to 7.45 yuan today.
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