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Shanghai index sees the biggest decline in 15 months
By Ye Zhen |
February 21, 2013, Thursday
|
Online Edition
Online Edition
SHANGHAI stocks plummeted today, making the key index suffer the biggest loss in nearly 15 months, after China's central bank drained a record amount of funds this week and the central government urged stepped-up efforts to impose property curbs.
The benchmark Shanghai Composite Index slumped 3 percent, the biggest fall since November 2011, to close at 2,325.95 points. Daily turnover was 126.6 billion yuan (US$20.4 billion).
The People's Bank of China today withdrew 10 billion yuan from the money market via 91-day repurchase agreements and another 10 billion yuan through 28-day agreements, bringing the total withdrawal to 910 billion yuan this week, the highest weekly amount ever.
The central bank on Tuesday launched a 28-day repurchase operation to withdraw 30 billion yuan, the first withdrawal in eight months, fuelling concern that the government may start to tighten monetary policy.
UBS Investment Research said in a report today that restarting repurchase operation is a normal move to reduce booming liquidity during the Spring Festival holiday rather than the beginning of a tightening circle.
However, the report added "the government may start to tighten policy as early as April as economy recovers, and consumer prices and home costs hike while concerns about excessive investment and financial risk emerge."
Property developers were pressured after the State Council yesterday urged home-purchase restrictions to curb housing speculation.
China Vanke, the nation's biggest developer, lost 1.1 percent to 11.31 yuan. Poly Real Estate, the second largest, shed 0.7 percent to 12.30 yuan. Gemdale Corporation declined 0.8 percent to 7.06 yuan.
Commodity-related stock took a hit after commodities plunged overnight with oil losing more than US$2 per barrel, gold reaching a 7-month low, and platinum, palladium and silver falling more than 3 percent, after the US Federal Reserve minutes showed the US policymakers debated about the risks of the central bank's bond-buying stimulus policy.
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Jiangxi Copper Co Ltd dived 6 percent to 24.32 yuan. Shandong Gold Mining Co lost 4.4 percent to 34.86 yuan. Zhongjin Gold Corp shed 4.8 percent to 15.16 yuan.
The benchmark Shanghai Composite Index slumped 3 percent, the biggest fall since November 2011, to close at 2,325.95 points. Daily turnover was 126.6 billion yuan (US$20.4 billion).
The People's Bank of China today withdrew 10 billion yuan from the money market via 91-day repurchase agreements and another 10 billion yuan through 28-day agreements, bringing the total withdrawal to 910 billion yuan this week, the highest weekly amount ever.
The central bank on Tuesday launched a 28-day repurchase operation to withdraw 30 billion yuan, the first withdrawal in eight months, fuelling concern that the government may start to tighten monetary policy.
UBS Investment Research said in a report today that restarting repurchase operation is a normal move to reduce booming liquidity during the Spring Festival holiday rather than the beginning of a tightening circle.
However, the report added "the government may start to tighten policy as early as April as economy recovers, and consumer prices and home costs hike while concerns about excessive investment and financial risk emerge."
Property developers were pressured after the State Council yesterday urged home-purchase restrictions to curb housing speculation.
China Vanke, the nation's biggest developer, lost 1.1 percent to 11.31 yuan. Poly Real Estate, the second largest, shed 0.7 percent to 12.30 yuan. Gemdale Corporation declined 0.8 percent to 7.06 yuan.
Commodity-related stock took a hit after commodities plunged overnight with oil losing more than US$2 per barrel, gold reaching a 7-month low, and platinum, palladium and silver falling more than 3 percent, after the US Federal Reserve minutes showed the US policymakers debated about the risks of the central bank's bond-buying stimulus policy.
.
Jiangxi Copper Co Ltd dived 6 percent to 24.32 yuan. Shandong Gold Mining Co lost 4.4 percent to 34.86 yuan. Zhongjin Gold Corp shed 4.8 percent to 15.16 yuan.
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