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Shanghai shares down 1% on weak sentiment
By Feng Jianmin |
August 9, 2011, Tuesday
|
Online Edition
Online Edition
SHANGHAI'S key stock index dropped for the third day and closed at the lowest in more than one year by noon break amid weak performance of neighboring markets, after China said July's inflation was highest in 37 months.
The benchmark Shanghai Composite Index fell 1.1 percent in the morning session after dropping as much as 3.5 percent shortly after opening. The index closed at 2.498.94 points, the lowest since July 19 last year.
Shanghai's performance was better than neighboring markets. The MSCI Asia Pacific Index, a regional index, slumped 4.9 percent at 12 pm in Tokyo. Hang Seng Index plunged 6 percent by noon.
Analysts said investors could buy low to seek future opportunities. Citibank said in a research note today that it expects the Shanghai Composite to rebound to 3,400, or up 20 percent in the short term.
"Blue chips such as property developers led a rebound in the morning session," the Guangzhou Wanlong Securities wrote in a note.
Property developers led the gainers on speculation that controlling measures will ease after policies take effect. The central bank yesterday said tightening measures have taken effect in large cities in China such as Beijing, Shanghai and Guangzhou. The number of bank settlement accounts to the property developers dropped for the fifth consecutive month in July, the central bank said on Monday.
China Vanke rose 2.2 percent to 8.24 yuan. Poly Real Estate Co jumped 3.74 percent to 10.82 yuan.
China's top statistics bureau said in the morning that consumer price index, a measure for inflation, rose to 6.5 percent in July from June's 6.4 percent. Pork prices jumped more than 55 percent from same period last year.
Oil and base metal producers led the decliners after copper and crude oil prices tumbled overseas overnight on concerns that demand will weaken against a backdrop of world economy. Oil lost 6.4 percent in New York and copper in London fell for the six consecutive day to US$8,755.75.
Petro China, China's largest oil producer, shed 1.1 percent to 9.75 yuan. Jiangxi Copper Co, China's largest producer of the metal, slid 1.7 percent to 32.24 yuan.
Across Asia, emerging Asia's capital markets have shown great resilience over the past year, but the recent sharp sell-offs in response to economic uncertainty in the US and eurozone underscore the need for stronger policies to boost investor confidence and reduce excessive volatility, the Asian Development Bank said in a report today.
"Emerging Asian markets remain vulnerable to abrupt changes in global investor sentiment," said Iwan Azis, Head of ADB's Office of Regional Economic Integration, which prepared the report. "The knock-on effects from events in the US and Europe will go far beyond portfolio returns, as a weakening global economy will hurt our exports."
The benchmark Shanghai Composite Index fell 1.1 percent in the morning session after dropping as much as 3.5 percent shortly after opening. The index closed at 2.498.94 points, the lowest since July 19 last year.
Shanghai's performance was better than neighboring markets. The MSCI Asia Pacific Index, a regional index, slumped 4.9 percent at 12 pm in Tokyo. Hang Seng Index plunged 6 percent by noon.
Analysts said investors could buy low to seek future opportunities. Citibank said in a research note today that it expects the Shanghai Composite to rebound to 3,400, or up 20 percent in the short term.
"Blue chips such as property developers led a rebound in the morning session," the Guangzhou Wanlong Securities wrote in a note.
Property developers led the gainers on speculation that controlling measures will ease after policies take effect. The central bank yesterday said tightening measures have taken effect in large cities in China such as Beijing, Shanghai and Guangzhou. The number of bank settlement accounts to the property developers dropped for the fifth consecutive month in July, the central bank said on Monday.
China Vanke rose 2.2 percent to 8.24 yuan. Poly Real Estate Co jumped 3.74 percent to 10.82 yuan.
China's top statistics bureau said in the morning that consumer price index, a measure for inflation, rose to 6.5 percent in July from June's 6.4 percent. Pork prices jumped more than 55 percent from same period last year.
Oil and base metal producers led the decliners after copper and crude oil prices tumbled overseas overnight on concerns that demand will weaken against a backdrop of world economy. Oil lost 6.4 percent in New York and copper in London fell for the six consecutive day to US$8,755.75.
Petro China, China's largest oil producer, shed 1.1 percent to 9.75 yuan. Jiangxi Copper Co, China's largest producer of the metal, slid 1.7 percent to 32.24 yuan.
Across Asia, emerging Asia's capital markets have shown great resilience over the past year, but the recent sharp sell-offs in response to economic uncertainty in the US and eurozone underscore the need for stronger policies to boost investor confidence and reduce excessive volatility, the Asian Development Bank said in a report today.
"Emerging Asian markets remain vulnerable to abrupt changes in global investor sentiment," said Iwan Azis, Head of ADB's Office of Regional Economic Integration, which prepared the report. "The knock-on effects from events in the US and Europe will go far beyond portfolio returns, as a weakening global economy will hurt our exports."
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