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Stock market declines following interest hike
By Lydia Chen |
February 10, 2011, Thursday
|
Print Edition
Print Edition
SHANGHAI stocks fell on the first trading day following the week-long Spring Festival holiday as heavyweights in the mining industry slumped and investors dumped developers and banks after the second interest rate rise in six weeks.
The benchmark Shanghai Composite Index lost 0.9 percent to stand at 2,774.07.
China's central bank on Tuesday raised its benchmark interest rates. The mining industry led the market down over falling metal prices in world markets on concerns the higher borrowing costs will lead to a slower demand for coals and metals. Yanzhou Coal Mining tumbled 4.8 percent to 24.89 yuan, and Jiangxi Copper sank 4.1 percent to 38.13 yuan.
Developers fell as investors believed the sector would be hit by the tightening measures. "Potential home buyers might be thwarted because they have to pay a lot more if they need a mortgage, which is bad for developers," said Gui Haoming, chief analyst of Shenyin and Wanguo Securities Poly Real Estate Group dived three percent to 12.51 yuan.
Banks were affected in a limited way, said HSBC Jintrust Fund Management. The one-year lending rate has been raised to 6.06 percent, compared with the one-year deposit rate of three percent. HSBC Jintrust said lenders can still benefit from the gap.
The benchmark Shanghai Composite Index lost 0.9 percent to stand at 2,774.07.
China's central bank on Tuesday raised its benchmark interest rates. The mining industry led the market down over falling metal prices in world markets on concerns the higher borrowing costs will lead to a slower demand for coals and metals. Yanzhou Coal Mining tumbled 4.8 percent to 24.89 yuan, and Jiangxi Copper sank 4.1 percent to 38.13 yuan.
Developers fell as investors believed the sector would be hit by the tightening measures. "Potential home buyers might be thwarted because they have to pay a lot more if they need a mortgage, which is bad for developers," said Gui Haoming, chief analyst of Shenyin and Wanguo Securities Poly Real Estate Group dived three percent to 12.51 yuan.
Banks were affected in a limited way, said HSBC Jintrust Fund Management. The one-year lending rate has been raised to 6.06 percent, compared with the one-year deposit rate of three percent. HSBC Jintrust said lenders can still benefit from the gap.
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