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Shanghai index drops most in two weeks
By Lydia Chen |
January 10, 2011, Monday
|
Online Edition
Online Edition
SHANGHAI'S key stock index fell below 2,800-point mark today as drug makers, developers and financial shares slumped amid jittery sentiment among investors.
The Shanghai Composite Index lost 1.66 percent, or 46.99 points, to 2,791.81. This was the biggest drop since December 28. Turnover shrank to 110.8 billion yuan (US$ 16.71 billion) from Friday's 137.2 billion yuan.
"The weak market performance continued because investors were still unsure about where it will head," said Chen Kaiwei, an analyst with Changjiang Securities.
Drug makers led the decliners today. Jiangsu Hengrui Medicine Co plunged 5.36 percent to 53 yuan. Yunnan Baiyao Group Co decreased 1.45 percent to 57.65 yuan.
Zhong Hua, an analyst with Guotai Jun'an Securities, said the drop was expected because it was time for investors to reap profit from drug makers after their long time rallies.
Financial shares and developers paired Friday's gains today. China Merchants Property Development Co lost 3.58 percent to 17.23 yuan. Industrial and Commercial Bank of China shed 1.40 percent to 4.24 yuan.
China is expected to release housing prices for December and the whole year of 2010 this week, which may invite more tightened policies if the figures do not reflect efforts by the government to curb assets bubbles.
"The drop among banks and developers was partly because of a weaker-than-expected liquidity improvement in the market this month," Zhong said.
"China's central bank is still keeping a close eye on all the lenders about their loan businesses while the US dollar is gaining strength, which diverted some money away," Zhong added.
He predicted the index would go further down to a range between 2,600 and 2,700 points.
Frms in communications, transportations and shipbuilding industries may be good investments this week, Zhong said.
The Shanghai Composite Index lost 1.66 percent, or 46.99 points, to 2,791.81. This was the biggest drop since December 28. Turnover shrank to 110.8 billion yuan (US$ 16.71 billion) from Friday's 137.2 billion yuan.
"The weak market performance continued because investors were still unsure about where it will head," said Chen Kaiwei, an analyst with Changjiang Securities.
Drug makers led the decliners today. Jiangsu Hengrui Medicine Co plunged 5.36 percent to 53 yuan. Yunnan Baiyao Group Co decreased 1.45 percent to 57.65 yuan.
Zhong Hua, an analyst with Guotai Jun'an Securities, said the drop was expected because it was time for investors to reap profit from drug makers after their long time rallies.
Financial shares and developers paired Friday's gains today. China Merchants Property Development Co lost 3.58 percent to 17.23 yuan. Industrial and Commercial Bank of China shed 1.40 percent to 4.24 yuan.
China is expected to release housing prices for December and the whole year of 2010 this week, which may invite more tightened policies if the figures do not reflect efforts by the government to curb assets bubbles.
"The drop among banks and developers was partly because of a weaker-than-expected liquidity improvement in the market this month," Zhong said.
"China's central bank is still keeping a close eye on all the lenders about their loan businesses while the US dollar is gaining strength, which diverted some money away," Zhong added.
He predicted the index would go further down to a range between 2,600 and 2,700 points.
Frms in communications, transportations and shipbuilding industries may be good investments this week, Zhong said.
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