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Shanghai stocks hit 43-month low as confidence falters
By Ye Zhen |
August 29, 2012, Wednesday
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Online Edition
Online Edition
SHANGHAI stocks tumbled today, sending the key index to its lowest in 43 months as investors speculated that policymakers may hold off additional easing measures.
The benchmark Shanghai Composite Index lost 0.96 percent, or 19.92 points to close at 2,053.24 points. Turnover was 41.6 billion yuan (US$6.6 billion).
Investors believed the government may delay further policy easing after the central bank yesterday released 125 billion yuan into the banking system via reverse repurchase agreements. It followed last week's infusion of 365 billion yuan.
The Chinese central bank has been using the reverse repurchase operations to adjust cash flows for 10 straight weeks, the longest streak in ten years.
Despite a liquidity crunch among lenders, a rebound in home prices is the main concern for policymakers to cut the bank reverse requirement ratio, said Peng Wensheng, chief economist at China International Capital Corp.
Non-ferrous metals producers led the market down. Inner Mongolia Baotou Steel Rare-earth (Group) Hi-tech Co, China's biggest producer of rare earth materials, slumped 6.6 percent to 32.91 yuan. Xiamen Tungsten Co shrank 3.3 percent to 38.28 yuan.
Most property developers lost after the central government reaffirmed its stance to prevent home prices from rebounding. China Vanke, the nation's biggest developer, shed 0.4 percent to finish at 7.97 yuan. Poly Real Estate, the second largest developer, dropped 1.5 percent to 9.10 yuan. Gemdale Corporation fell 0.8 percent to 4.93 yuan.
Distilleries posted a weak run. Kweichow Moutai Co, a leading producer of high-end liquor in China, sank 2.8 percent to 219.16 yuan. Sichuan Tuopai Shede Wine Co shed 2.8 percent to 29.98 yuan.
The benchmark Shanghai Composite Index lost 0.96 percent, or 19.92 points to close at 2,053.24 points. Turnover was 41.6 billion yuan (US$6.6 billion).
Investors believed the government may delay further policy easing after the central bank yesterday released 125 billion yuan into the banking system via reverse repurchase agreements. It followed last week's infusion of 365 billion yuan.
The Chinese central bank has been using the reverse repurchase operations to adjust cash flows for 10 straight weeks, the longest streak in ten years.
Despite a liquidity crunch among lenders, a rebound in home prices is the main concern for policymakers to cut the bank reverse requirement ratio, said Peng Wensheng, chief economist at China International Capital Corp.
Non-ferrous metals producers led the market down. Inner Mongolia Baotou Steel Rare-earth (Group) Hi-tech Co, China's biggest producer of rare earth materials, slumped 6.6 percent to 32.91 yuan. Xiamen Tungsten Co shrank 3.3 percent to 38.28 yuan.
Most property developers lost after the central government reaffirmed its stance to prevent home prices from rebounding. China Vanke, the nation's biggest developer, shed 0.4 percent to finish at 7.97 yuan. Poly Real Estate, the second largest developer, dropped 1.5 percent to 9.10 yuan. Gemdale Corporation fell 0.8 percent to 4.93 yuan.
Distilleries posted a weak run. Kweichow Moutai Co, a leading producer of high-end liquor in China, sank 2.8 percent to 219.16 yuan. Sichuan Tuopai Shede Wine Co shed 2.8 percent to 29.98 yuan.
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