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Shanghai index lower on tightening concerns
By Feng Jianmin and Joyce Pan |
November 3, 2010, Wednesday
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Online Edition
Online Edition
SHANGHAI'S key equity index ended lower on concerns for a tighter monetary policy to tame growing pressure of imported inflation if the US dollar continues to weaken.
The Shanghai Composite Index dipped 0.47 percent, or 14.45 points to 3,030.99. Turnover was 244 billion yuan (US$ 36 billion).
Commodity prices grew overnight as the US dollar weakened on prospect of a quantitative easing plan which will be released tonight. Cotton futures overnight in New York rose to a record, while sugar was at a 29-year high. Oil also ended at six month high at above US$84 a barrel.
"While the markets awaited the results of Congressional elections and loosening measures, expectations on over a tighter grasp on domestic liquidity is mounting and weighed on the stock market," GF Securities Co wrote in a research note.
The People's Bank of China, China's central bank, said yesterday that an economic stimulus plan may end once economy starts to pick up. The stance stirred the market sentiment on possible new tightening to come.
China raised its interest rates on October 20 as the first rate increase since the end of 2007.
Metal producers led the losers on media reports that the Ministry of Commerce will reduce the export quota of rare metals such as tin and rare earth while a study on strategic reserve of these metals is under way to stabilize their prices.
Minmetals Development Co tumbled 9.7 percent to 33.19 yuan. Aluminum Corp of China slumped 6.8 percent to 12.39 yuan and Yunnan Tin Co plunged 4.6 percent to 39.1 yuan.
Agricultural related companies led the gainers on speculation that faster inflation may boost their earnings. Kuichow Moutai Co, a major liquor maker in China, gained 0.4 percent to 163.35 yuan. Beijing Shunxin Agriculture Co rose 4.8 percent to 26.49 yuan. Gansu Dunhuang Seed Co added 0.5 percent to 34 yuan.
Banks gained. China Merchants Bank jumped 3.4 percent to 15.26 yuan. China Construction Bank rose 1.5 percent to 5.28 yuan. Pudong Development Bank grew 1.3 percent to 14.69 yuan.
ChiNext, an index tracking around 130 start-ups, extended previous losses after the Shenzhen bourse ruled that institutional investors cannot buy in if the shares' daily growth exceeds 5 percent.
The Shanghai Composite Index dipped 0.47 percent, or 14.45 points to 3,030.99. Turnover was 244 billion yuan (US$ 36 billion).
Commodity prices grew overnight as the US dollar weakened on prospect of a quantitative easing plan which will be released tonight. Cotton futures overnight in New York rose to a record, while sugar was at a 29-year high. Oil also ended at six month high at above US$84 a barrel.
"While the markets awaited the results of Congressional elections and loosening measures, expectations on over a tighter grasp on domestic liquidity is mounting and weighed on the stock market," GF Securities Co wrote in a research note.
The People's Bank of China, China's central bank, said yesterday that an economic stimulus plan may end once economy starts to pick up. The stance stirred the market sentiment on possible new tightening to come.
China raised its interest rates on October 20 as the first rate increase since the end of 2007.
Metal producers led the losers on media reports that the Ministry of Commerce will reduce the export quota of rare metals such as tin and rare earth while a study on strategic reserve of these metals is under way to stabilize their prices.
Minmetals Development Co tumbled 9.7 percent to 33.19 yuan. Aluminum Corp of China slumped 6.8 percent to 12.39 yuan and Yunnan Tin Co plunged 4.6 percent to 39.1 yuan.
Agricultural related companies led the gainers on speculation that faster inflation may boost their earnings. Kuichow Moutai Co, a major liquor maker in China, gained 0.4 percent to 163.35 yuan. Beijing Shunxin Agriculture Co rose 4.8 percent to 26.49 yuan. Gansu Dunhuang Seed Co added 0.5 percent to 34 yuan.
Banks gained. China Merchants Bank jumped 3.4 percent to 15.26 yuan. China Construction Bank rose 1.5 percent to 5.28 yuan. Pudong Development Bank grew 1.3 percent to 14.69 yuan.
ChiNext, an index tracking around 130 start-ups, extended previous losses after the Shenzhen bourse ruled that institutional investors cannot buy in if the shares' daily growth exceeds 5 percent.
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