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October 30, 2009

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Home » Business » Finance

Market slumps over concerns of tightened monetary policy

SHANGHAI'S key stock index lost more than 2 percent yesterday with concerns over liquidity as more countries tighten monetary policy.

The benchmark Shanghai Composite Index lost 2.34 percent, or 70.86 points, to close at 2,960.47. Turnover rose to 117.3 billion yuan (US$17.25 billion) from 114.2 billion yuan.

"Norway has joined Australia to raise the interest rate, leading to growing expectations of the global exit of the loose monetary policies used to handle the financial crisis," Yu Junwei, an analyst at Shanghai Shiji Investment Consulting Co, wrote in a research note.

China may also increase monitoring of personal loans to try to prevent capital flowing into the stock market and property sector.

Lenders led the losers. The Industrial and Commercial Bank of China, the nation's biggest lender, decreased 2.2 percent to 4.95 yuan. Shanghai Pudong Development Bank lost 1.2 percent to 21.57 yuan. China Construction Bank dropped 1.9 percent to 5.79 yuan. The Bank of Communications lost 3.2 percent to 8.48 yuan.

Metal producers were also weak. Yunnan Copper Co lost 5.5 percent to 29.57 yuan. Shandong Gold Mining Co dropped 2.9 percent to 64.72 yuan. Aluminum Corporation of China Ltd slumped 6.4 percent to 13.52 yuan. Zijin Mining Co decreased 3 percent to 8.99 yuan.

Bucking the downward trend, drug makers gained as the government called for a faster pace in swine flu vaccinations and faster production of doses, which may boost revenue.

Hualan Biological Engineering Inc jumped 5 percent to 59.5 yuan. Jiangsu Lianhuan Pharmaceutical Co surged the daily limit of 10 percent to 12.38 yuan.


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