Share oversupply fears hurt index
By Ye Zhen |
October 9, 2012, Tuesday
|
Print Edition
Print Edition
SHANGHAI stocks fell yesterday amid concern that more non-tradable shares to be unlocked this week may create an oversupply of shares.
The Shanghai Composite Index lost 0.56 percent to close at 2,074.42 points after resuming trading following an eight-day public holiday for National Day and Mid-Autumn festival.
Some 1.8 billion non-tradable shares, valued at 17.9 billion yuan (US$2.8 billion), in the Shanghai and Shenzhen stock markets will be allowed to circulate this week. The amount is above the 2.8 billion yuan in the week before the holiday, the Shanghai Securities News said yesterday.
Xiangcai Securities cautioned that unlocking non-tradable shares may hurt stock prices in a bearish market.
Meanwhile, the HSBC China Service Purchasing Managers Index, a gauge of non-manufacturing activity in the private and export-oriented sectors, rose to 54.3 in September from a year-low 52 in August, HSBC Holdings Plc reported yesterday. A reading above 50 means growth.
"The business activity in the service sector accelerated last month due to rising new orders," said Qu Hongbin, chief economist for China at HSBC. "The domestic economic situation may have improved due to earlier easing measures and stronger consumption demand during the National Day holiday."
Distilleries fell the most. Kweichow Moutai Co, a leading Chinese maker of high-end liquor, fell 2.4 percent to 239.94 yuan. Sichuan Tuopai Shede Wine Co lost 1.6 percent to 31.98 yuan and Sichuan Swellfun Co shed 2.1 percent to 23.69 yuan.
The Shanghai Composite Index lost 0.56 percent to close at 2,074.42 points after resuming trading following an eight-day public holiday for National Day and Mid-Autumn festival.
Some 1.8 billion non-tradable shares, valued at 17.9 billion yuan (US$2.8 billion), in the Shanghai and Shenzhen stock markets will be allowed to circulate this week. The amount is above the 2.8 billion yuan in the week before the holiday, the Shanghai Securities News said yesterday.
Xiangcai Securities cautioned that unlocking non-tradable shares may hurt stock prices in a bearish market.
Meanwhile, the HSBC China Service Purchasing Managers Index, a gauge of non-manufacturing activity in the private and export-oriented sectors, rose to 54.3 in September from a year-low 52 in August, HSBC Holdings Plc reported yesterday. A reading above 50 means growth.
"The business activity in the service sector accelerated last month due to rising new orders," said Qu Hongbin, chief economist for China at HSBC. "The domestic economic situation may have improved due to earlier easing measures and stronger consumption demand during the National Day holiday."
Distilleries fell the most. Kweichow Moutai Co, a leading Chinese maker of high-end liquor, fell 2.4 percent to 239.94 yuan. Sichuan Tuopai Shede Wine Co lost 1.6 percent to 31.98 yuan and Sichuan Swellfun Co shed 2.1 percent to 23.69 yuan.
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