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Shanghai shares drop on tightening concerns
By Feng Jianmin |
October 12, 2010, Tuesday
|
Online Edition
Online Edition
SHANGHAI'S key stock index closed slightly lower after three days of rally, as investors' enthusiasm ebbs on concerns about central government's measures to tighten liquidity.
The benchmark Shanghai Composite Index dipped 0.27 percent, or 7.7 points, to close at 2,799.23 points. Turnover fell to 104 billion yuan (US$22.9 billion) from yesterday morning's 153 billion yuan.
The Shenzhen Component Index, which tracks the smaller mainland exchange, edged up 0.23 percent to 12,265.89.
China's central bank yesterday raised reserve requirement ratios for six large commercial banks on a temporary basis, to drain cash from the economy but avoid over-tightening.
The move is expected to freeze liquidity of 280 billion yuan to 300 billion yuan, according to analysts.
Banks declined. Bank of China fell 1.46 percent to 3.37 yuan. Agricultural Bank of China fell 0.74 percent to 2.68 yuan. Industrial and Commercial Bank of China lost 0.95 percent to 4.16 yuan.
Steel makers led the losers. Baoshan Iron and steel Co fell 2.39 percent to 6.94 yuan. Inner Mongolian Baotou Steel Union declined 1.72 percent to 3.42 yuan. Beijing Shougang Co retreated 2.33 percent to 4.19 yuan.
Car producers led the gainers as the China Association of Automobile Manufactures estimated that car sales this year will hit 17 million, and after the Ministry of Industry and Information Technology yesterday raised entrance threshold for the tire industry to regulate production.
SAIC Motor Co, China's largest car maker climbed 7.37 percent to 18.5 yuan after reporting sales of 324,800 cars in September, up 23.3 percent from last year. FAW Car Co added 3.69 percent to 20.53 yuan. Guizhou Tyre Co jumped by daily limit of 10 percent to 13.74 yuan.
The benchmark Shanghai Composite Index dipped 0.27 percent, or 7.7 points, to close at 2,799.23 points. Turnover fell to 104 billion yuan (US$22.9 billion) from yesterday morning's 153 billion yuan.
The Shenzhen Component Index, which tracks the smaller mainland exchange, edged up 0.23 percent to 12,265.89.
China's central bank yesterday raised reserve requirement ratios for six large commercial banks on a temporary basis, to drain cash from the economy but avoid over-tightening.
The move is expected to freeze liquidity of 280 billion yuan to 300 billion yuan, according to analysts.
Banks declined. Bank of China fell 1.46 percent to 3.37 yuan. Agricultural Bank of China fell 0.74 percent to 2.68 yuan. Industrial and Commercial Bank of China lost 0.95 percent to 4.16 yuan.
Steel makers led the losers. Baoshan Iron and steel Co fell 2.39 percent to 6.94 yuan. Inner Mongolian Baotou Steel Union declined 1.72 percent to 3.42 yuan. Beijing Shougang Co retreated 2.33 percent to 4.19 yuan.
Car producers led the gainers as the China Association of Automobile Manufactures estimated that car sales this year will hit 17 million, and after the Ministry of Industry and Information Technology yesterday raised entrance threshold for the tire industry to regulate production.
SAIC Motor Co, China's largest car maker climbed 7.37 percent to 18.5 yuan after reporting sales of 324,800 cars in September, up 23.3 percent from last year. FAW Car Co added 3.69 percent to 20.53 yuan. Guizhou Tyre Co jumped by daily limit of 10 percent to 13.74 yuan.
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