Profit-taking pushes index 1.7% lower
By Feng Jianmin and Pan Xiaoyi |
August 21, 2010, Saturday
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Print Edition
Print Edition
SHANGHAI'S key stock index dropped the most in almost two weeks yesterday following a slump in the United States share market on Thursday and on profit-taking.
The Shanghai Composite Index fell 1.7 percent, the most since August 10, to close at 2,642.31. Turnover shrank to 119.8 billion yuan (US$ 17.6 billion) from yesterday's 133.2 billion yuan.
But for the week the barometer still posted a rise of 1.4 percent.
"Investors seem eager to take profit in sectors such as financials and healthcare that had outperformed in the recent rally, a sign that they were jittery over the sustainability of recent rebounds," Sinolink Securities Co said.
Banks ended lower after the Securities Times reported banks may need to make provisions for loans to local governments. China Merchants Bank dipped 0.7 percent to 14.09 yuan, and the Industrial and Commercial Bank of China fell 0.5 percent to 4.16 yuan.
Chinese banks may need to set aside 600 billion yuan to provision for bad local-government loans, the Securities Times reported, citing its own calculations based on figures announced by the government. The calculation assumed 20 percent of about 1.66 trillion yuan in loans to local government financing arms go bad with a 200 percent coverage rate, the report said.
Decliners also included China National Medicines Corp, which tumbled 5.2 percent to 23.32 yuan. Tianjin Tasly Pharmaceutical Co dropped 3.8 percent to 33.12 yuan, and Tianjin Zhongxin Pharmaceutical Group down 5.2 percent to 13.72 yuan.
Wall Street stocks dived on Thursday, ending a two-day rally as disappointing jobless and industrial data rekindled worries about the US economic recovery. The Dow Jones Industrial Average plunged 1.39 percent to 10,271.21.
The Shanghai Composite Index fell 1.7 percent, the most since August 10, to close at 2,642.31. Turnover shrank to 119.8 billion yuan (US$ 17.6 billion) from yesterday's 133.2 billion yuan.
But for the week the barometer still posted a rise of 1.4 percent.
"Investors seem eager to take profit in sectors such as financials and healthcare that had outperformed in the recent rally, a sign that they were jittery over the sustainability of recent rebounds," Sinolink Securities Co said.
Banks ended lower after the Securities Times reported banks may need to make provisions for loans to local governments. China Merchants Bank dipped 0.7 percent to 14.09 yuan, and the Industrial and Commercial Bank of China fell 0.5 percent to 4.16 yuan.
Chinese banks may need to set aside 600 billion yuan to provision for bad local-government loans, the Securities Times reported, citing its own calculations based on figures announced by the government. The calculation assumed 20 percent of about 1.66 trillion yuan in loans to local government financing arms go bad with a 200 percent coverage rate, the report said.
Decliners also included China National Medicines Corp, which tumbled 5.2 percent to 23.32 yuan. Tianjin Tasly Pharmaceutical Co dropped 3.8 percent to 33.12 yuan, and Tianjin Zhongxin Pharmaceutical Group down 5.2 percent to 13.72 yuan.
Wall Street stocks dived on Thursday, ending a two-day rally as disappointing jobless and industrial data rekindled worries about the US economic recovery. The Dow Jones Industrial Average plunged 1.39 percent to 10,271.21.
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