Shares slide on liquidity fears
By Feng Jianmin |
June 14, 2011, Tuesday
|
Print Edition
Print Edition
SHANGHAI'S key stock index yesterday fell to a more than four-month low on liquidity concerns after China's central bank said new loans shrank in May and the cost of borrowing was rising.
The benchmark Shanghai Composite Index lost 0.2 percent to 2,700.38 points, the lowest close since January 25.
China's central bank yesterday said 551.6 billion yuan of new loans were issued in May, 100.5 billion yuan less than a year earlier. The weighted average interbank interest rate was 2.93 percent, 0.77 percentage points higher than a month earlier.
"The amount of new loans was slightly below our expectations," said Duan Jihua, an analyst with Guohai Securities. "The economy is still slowing down and we expect tight monetary policies to remain in place."
Key economic data, including inflation, investment and consumption figures, are due out today. A China International Capital Corp report estimated that the Consumer Price Index, a main gauge of inflation, would rise 5.6 percent from a year earlier in May. It said inflation may hit 6 percent in June.
CICC said the market will not rebound until July or August, when inflation has peaked, and the company reaffirmed its prediction that the benchmark index will fluctuate between 2,600 and 3,200 points this year.
Air carriers fell on concern competition from high-speed rail will hurt earnings. China Southern Airlines Co, the nation's largest carrier, dropped 1.4 percent to 7.31 yuan, the lowest close since September 2. China Eastern Airlines Corp retreated 1.8 percent to 5.04 yuan. Air China Ltd lost 2.1 percent to 8.97 yuan.
Authorities yesterday announced ticket prices of the Beijing-Shanghai bullet-train line, which will open later this month, posing a threat to local airlines on their busiest route.
Gold miners dropped after the gold price fell to US$1,530 per ounce. Shandong Gold Mining Group Co lost 0.7 percent to 45.31 yuan.
The benchmark Shanghai Composite Index lost 0.2 percent to 2,700.38 points, the lowest close since January 25.
China's central bank yesterday said 551.6 billion yuan of new loans were issued in May, 100.5 billion yuan less than a year earlier. The weighted average interbank interest rate was 2.93 percent, 0.77 percentage points higher than a month earlier.
"The amount of new loans was slightly below our expectations," said Duan Jihua, an analyst with Guohai Securities. "The economy is still slowing down and we expect tight monetary policies to remain in place."
Key economic data, including inflation, investment and consumption figures, are due out today. A China International Capital Corp report estimated that the Consumer Price Index, a main gauge of inflation, would rise 5.6 percent from a year earlier in May. It said inflation may hit 6 percent in June.
CICC said the market will not rebound until July or August, when inflation has peaked, and the company reaffirmed its prediction that the benchmark index will fluctuate between 2,600 and 3,200 points this year.
Air carriers fell on concern competition from high-speed rail will hurt earnings. China Southern Airlines Co, the nation's largest carrier, dropped 1.4 percent to 7.31 yuan, the lowest close since September 2. China Eastern Airlines Corp retreated 1.8 percent to 5.04 yuan. Air China Ltd lost 2.1 percent to 8.97 yuan.
Authorities yesterday announced ticket prices of the Beijing-Shanghai bullet-train line, which will open later this month, posing a threat to local airlines on their busiest route.
Gold miners dropped after the gold price fell to US$1,530 per ounce. Shandong Gold Mining Group Co lost 0.7 percent to 45.31 yuan.
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