Shares fall for 3rd day on selling pressure
Print Edition
SHANGHAI shares yesterday fell for a third day amid selling pressure while investors ignored the central bank’s cash injection into the financial markets.
The Shanghai Composite Index slumped 2.92 percent to 2,655.66 points.
Shipbuilders led the drop in industrial shares, with China Shipbuilding Industry Co falling by the 10 percent daily limit to 6.02 yuan (92 US cents) as did China CSSC Holdings to 21.57 yuan.
Traders said there’s too much hedging pressure to lock in profits but then investors quickly sold shares as soon as there was a rebound.
Investors were also concerned about volatility in the yuan as that would trigger capital outflows, market watchers said.
“The correction isn’t over and stocks will fall to an even lower level as concerns over a yuan depreciation, capital outflows and slowing growth are huge,” said Zhang Haidong, chief strategist at Jinkuang Investment Management in Shanghai. He added that all these factors “will weigh on the market.”
This week saw the People’s Bank of China injecting a net 590 billion yuan into the money markets before the start of the Chinese New Year on February 8, according to data compiled by Bloomberg News.
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