Shares fall by biggest weekly dip in 4 months
Print Edition
Shanghai stocks yesterday fell for a fourth straight day, with the key index posting its biggest weekly decline in four months, on lingering investor jitters over liquidity amid rising money costs.
The Shanghai Composite Index shed 1.45 percent, or 31.37 points, to 2,132.96. The index fell 2.77 percent for the week — the biggest weekly drop since the week ended on June 28.
“Investor worries about policy tightening grew as the central bank refrained from injecting liquidity,” Tu Jun, an analyst with Shanghai Securities, said in a report.
Data from the National Interbank Funding Center showed the seven-day repurchase rate, a gauge of funding availability, rose 140 basis points this week to 4.89 percent in Shanghai yesterday. It was the biggest weekly gain since June when the market suffered its worst liquidity crisis in over a decade.
The People’s Bank of China suspended twice-weekly auctions of reverse repo agreements for a third session yesterday, allowing a net 58 billion yuan (US$9.5 billion) to be drained from the financial system, after withdrawing 44.5 billion yuan last week.
Shares related to the pilot free trade zone in Shanghai plunged. Shanghai Waigaoqiao Free Trade Zone Development Co, which operates two of the four bonded areas in the zone, tumbled by the daily limit of 10 percent to 41.58 yuan, after surging above 200 percent since the end of August. BesTV New Media Co, which has a joint venture with Microsoft in the zone, shed 4.5 percent to close at 37.92 yuan.
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