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Shanghai index drops to lowest in 3 months
By Feng Jianmin |
January 20, 2011, Thursday
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Online Edition
Online Edition
SHANGHAI'S key stock index dropped to the lowest in more than three months on concerns for tighter monetary policies after statistics showed stronger-than-expected economic growth in the last quarter of 2010.
The benchmark Shanghai Composite Index went down 2.92 percent to 2,677.65 points. Turnover rose to 96.9 billion yuan (US$14.7 billion) from yesterday's 90 billion yuan.
The Shenzhen Composite Index, which tracks the smaller mainland market, was down 3.4 percent at 1,170.47 points.
China's top statistics bureau said today growth in Gross Domestic Product accelerated to a more-than-forecast 9.8 percent in the fourth quarter. For the whole 2010, the economy expanded 10.3 percent, the fastest pace in three years, the statistics bureau report showed.
"The economic statistics did not surprise the market, and was already reflected in the recent market behavior," said Bian Fengwei, an analyst with Guotai Junan Securities. "Inflation pressure will be stronger around the Spring Festival, and the actual effect of less market liquidity is starting to be felt."
He warned that the market will continue to fall until consumer prices reach the peak, which is likely to occur after March.
Several major commercial banks, including China Development Bank and Bank of China, have halted lending for less important projects under regulatory pressure, the 21st Century Business Herald reported today, citing unidentified sources familiar with the issue.
Industry insiders said that loan quota is now under monthly review and some banks have used up the loan quota for January, the newspaper said.
Banks dropped. Bank of China lost 1.3 percent to 3.17 yuan. China Construction Bank fell 2.3 percent to 4.66 yuan. Industrial and Commercial Bank of China went down 1.9 percent to 4.15 yuan.
Commodity producers were weak. Jiangxi Copper Co shed 6 percent to 36.95 yuan. Shandong Gold Mining Co dropped 4.7 percent to 44.15 yuan. Datong Coal Industry Co slid 4.4 percent to 18.58 yuan.
Aluminum Corp of China, the nation's largest maker of the metal, climbed 4.4 percent to 10.45 yuan after the company's parent said it had recovered from a loss in 2010 and made a profit of 2.7 billion yuan. The company lost 4.6 billion yuan in 2009, according to its annual report last year.
The benchmark Shanghai Composite Index went down 2.92 percent to 2,677.65 points. Turnover rose to 96.9 billion yuan (US$14.7 billion) from yesterday's 90 billion yuan.
The Shenzhen Composite Index, which tracks the smaller mainland market, was down 3.4 percent at 1,170.47 points.
China's top statistics bureau said today growth in Gross Domestic Product accelerated to a more-than-forecast 9.8 percent in the fourth quarter. For the whole 2010, the economy expanded 10.3 percent, the fastest pace in three years, the statistics bureau report showed.
"The economic statistics did not surprise the market, and was already reflected in the recent market behavior," said Bian Fengwei, an analyst with Guotai Junan Securities. "Inflation pressure will be stronger around the Spring Festival, and the actual effect of less market liquidity is starting to be felt."
He warned that the market will continue to fall until consumer prices reach the peak, which is likely to occur after March.
Several major commercial banks, including China Development Bank and Bank of China, have halted lending for less important projects under regulatory pressure, the 21st Century Business Herald reported today, citing unidentified sources familiar with the issue.
Industry insiders said that loan quota is now under monthly review and some banks have used up the loan quota for January, the newspaper said.
Banks dropped. Bank of China lost 1.3 percent to 3.17 yuan. China Construction Bank fell 2.3 percent to 4.66 yuan. Industrial and Commercial Bank of China went down 1.9 percent to 4.15 yuan.
Commodity producers were weak. Jiangxi Copper Co shed 6 percent to 36.95 yuan. Shandong Gold Mining Co dropped 4.7 percent to 44.15 yuan. Datong Coal Industry Co slid 4.4 percent to 18.58 yuan.
Aluminum Corp of China, the nation's largest maker of the metal, climbed 4.4 percent to 10.45 yuan after the company's parent said it had recovered from a loss in 2010 and made a profit of 2.7 billion yuan. The company lost 4.6 billion yuan in 2009, according to its annual report last year.
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