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Shanghai index slumps most in 4 months amid slowdown concern
By Feng Jianmin |
May 23, 2011, Monday
|
Online Edition
Online Edition
Shanghai's key stock index posted the biggest daily drop in four months after a survey showed China's manufacturing growth in May is likely to fall to the slowest in 10 months.
The plunge, sending the gauge to the lowest in three months and a half, was also partly attributed to the news that China will quicken the pace to launch an international board for overseas firms to raise funds, fanning concerns about liquidity.
The Shanghai Composite Index lost 2.93 percent to 2,774.57, the largest daily decline since January 17. Turnover jumped to 112.6 billion yuan (US$17.3 billion) from last Friday's 84 billion yuan.
"The launch of the international board will certainly diverge existing capital," Morgan Stanley Huaxin Funds Management Co wrote in a report. "Some overpriced companies will face the pressure coming from new listings."
Meanwhile, a preliminary reading of a purchasing managers' index was 51.1, the lowest in 10 months, HSBC Holdings Plc and Markit Economics said today. That compared to a final reading of 51.8 in April.
The accumulative impact of tightening measures is emerging and China's economic growth is slowing down as expected, ABC-CA Fund Management Co said in a report.
Steel firms and property developers led the decliners on jitters about slower economic growth and further tightening measures.
Jiangxi Zhongjiang Real Estate Co shed 8.8 percent to 9.73 yuan. China Merchants Development Co was down 4.2 percent to 17.41 yuan.
Inner Mongolian Baotou Steel Union Co slid 7.1 percent to 6.90 yuan. Baoshan Iron & Steel Co lost 2.7 percent to 6.42 yuan.
Agricultural related firms outperformed. Hunan Jinjian Cereals Industry Co surged 7.3 percent to 8.54 yuan.
The plunge, sending the gauge to the lowest in three months and a half, was also partly attributed to the news that China will quicken the pace to launch an international board for overseas firms to raise funds, fanning concerns about liquidity.
The Shanghai Composite Index lost 2.93 percent to 2,774.57, the largest daily decline since January 17. Turnover jumped to 112.6 billion yuan (US$17.3 billion) from last Friday's 84 billion yuan.
"The launch of the international board will certainly diverge existing capital," Morgan Stanley Huaxin Funds Management Co wrote in a report. "Some overpriced companies will face the pressure coming from new listings."
Meanwhile, a preliminary reading of a purchasing managers' index was 51.1, the lowest in 10 months, HSBC Holdings Plc and Markit Economics said today. That compared to a final reading of 51.8 in April.
The accumulative impact of tightening measures is emerging and China's economic growth is slowing down as expected, ABC-CA Fund Management Co said in a report.
Steel firms and property developers led the decliners on jitters about slower economic growth and further tightening measures.
Jiangxi Zhongjiang Real Estate Co shed 8.8 percent to 9.73 yuan. China Merchants Development Co was down 4.2 percent to 17.41 yuan.
Inner Mongolian Baotou Steel Union Co slid 7.1 percent to 6.90 yuan. Baoshan Iron & Steel Co lost 2.7 percent to 6.42 yuan.
Agricultural related firms outperformed. Hunan Jinjian Cereals Industry Co surged 7.3 percent to 8.54 yuan.
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