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Shanghai index falls below 2,000 points
By Ye Zhen |
November 28, 2012, Wednesday
|
Print Edition
Print Edition
SHANGHAI stocks yesterday fell the most in two weeks, sending the key index to below the psychological 2,000-point barrier, as jitters over a potential liquidity crunch overshadowed an accelerated growth in China's industrial profit.
The benchmark Shanghai Composite Index slumped 1.3 percent to 1,991.17 points, the lowest close since January 23, 2009, when it closed at 1,990.66. It is also the first time since then that the index has closed below 2,000 points.
The combined profit of China's major industrial companies rose 0.5 percent in the first 10 months of this year, compared with a 1.8 percent drop in the January-September period, the National Bureau of Statistics said yesterday.
Industrial profit posted an annual gain of 20.5 percent to 500 billion yuan (US$80.6 billion) in October, up sharply from September's increase of 7.8 percent.
Although the new data indicated China's economy is recovering, it was not enough to boost the stock market, analysts said.
"A moderate rebound in economic fundamentals is unlikely to lift the stock index in the short term, especially during a policy vacuum. Concerns over a year-end liquidity crunch remain the prime barrier for the market," Changjiang Securities said in a report.
Market confidence was further eroded after data from the Desheng Fund Research Center showed that Chinese funds reduced their equity weighting for three consecutive weeks to a 12-month low of 73.69 percent.
Media and entertainment companies were among the biggest losers. Jishi Media Co slumped 6.7 percent to 6.93 yuan. BesTV New Media Co lost 5.8 percent to 13.88 yuan.
The benchmark Shanghai Composite Index slumped 1.3 percent to 1,991.17 points, the lowest close since January 23, 2009, when it closed at 1,990.66. It is also the first time since then that the index has closed below 2,000 points.
The combined profit of China's major industrial companies rose 0.5 percent in the first 10 months of this year, compared with a 1.8 percent drop in the January-September period, the National Bureau of Statistics said yesterday.
Industrial profit posted an annual gain of 20.5 percent to 500 billion yuan (US$80.6 billion) in October, up sharply from September's increase of 7.8 percent.
Although the new data indicated China's economy is recovering, it was not enough to boost the stock market, analysts said.
"A moderate rebound in economic fundamentals is unlikely to lift the stock index in the short term, especially during a policy vacuum. Concerns over a year-end liquidity crunch remain the prime barrier for the market," Changjiang Securities said in a report.
Market confidence was further eroded after data from the Desheng Fund Research Center showed that Chinese funds reduced their equity weighting for three consecutive weeks to a 12-month low of 73.69 percent.
Media and entertainment companies were among the biggest losers. Jishi Media Co slumped 6.7 percent to 6.93 yuan. BesTV New Media Co lost 5.8 percent to 13.88 yuan.
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