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Stocks close down on inflation concerns
By Lydia Chen |
November 8, 2011, Tuesday
|
Online Edition
Online Edition
SHARES in Shanghai extended losses for a second day today as investors chose to stay cautious ahead of the release of the country's inflation data tomorrow.
The Shanghai Composite Index was down 0.24 percent to 2,503.84. Turnover slid slightly to 76.9 billion yuan (US$12.17 billion) from yesterday's 78.9 billion yuan.
Sectors that are sensitive to the country's growth, including cement and steel makers, were among the worst hit today while developers continued to slide after reports showed that new homes in Shanghai had plunged last week.
Xinjiang Qingsong Building Materials and Chemicals Group Co lost 2.58 percent to 14.72 yuan, while Xinjiang Ba Yi Iron & Steel Co shed 2.77 percent to 10.2 yuan.
Shanghai Shimao Co slumped 4.11 percent to 11.67 yuan.
Weekly sales of new homes dropped 32.4 percent from a week earlier during the seven-day period that ended Sunday in Shanghai as a wait-and-see sentiment prevailed among home seekers, according to Shanghai Deovolente Realty Co.
The Shanghai Securities News also said today that authorities had prepared several measures to prevent home prices from rebounding. Possible curbs include a property tax, according to the report.
Meanwhile, analysts at Citic Securities today said it expected that China would start lowering its bank reserve requirement ratio before the Chinese Spring Festival that falls on January 23 – a move that could boost the stock market.
The People's Bank of China today said it had issued 10 billion yuan of one-year repurchase agreements at a yield of 3.57 percent, 1.07 basic points lower than a week earlier, which raised expectations that China may lower the RRR from a record high of 21.5 percent.
The country's inflation for October may slip to 5.6 percent from 6.1 percent in September, according to a note by Sinolink Securities Co today.
The downward trend in prices might continue this month with expected inflation dropping to 4.5 percent for November, Lu said. However, it is likely to bounce back in December in anticipation of the Chinese New Year spending spree, according to the note.
But analysts at Bank of Communications cautioned today that the pace of inflation falls might be limited given that labor costs were bound to rise for a long term while prices of commodities were still running at high levels.
The Shanghai Composite Index was down 0.24 percent to 2,503.84. Turnover slid slightly to 76.9 billion yuan (US$12.17 billion) from yesterday's 78.9 billion yuan.
Sectors that are sensitive to the country's growth, including cement and steel makers, were among the worst hit today while developers continued to slide after reports showed that new homes in Shanghai had plunged last week.
Xinjiang Qingsong Building Materials and Chemicals Group Co lost 2.58 percent to 14.72 yuan, while Xinjiang Ba Yi Iron & Steel Co shed 2.77 percent to 10.2 yuan.
Shanghai Shimao Co slumped 4.11 percent to 11.67 yuan.
Weekly sales of new homes dropped 32.4 percent from a week earlier during the seven-day period that ended Sunday in Shanghai as a wait-and-see sentiment prevailed among home seekers, according to Shanghai Deovolente Realty Co.
The Shanghai Securities News also said today that authorities had prepared several measures to prevent home prices from rebounding. Possible curbs include a property tax, according to the report.
Meanwhile, analysts at Citic Securities today said it expected that China would start lowering its bank reserve requirement ratio before the Chinese Spring Festival that falls on January 23 – a move that could boost the stock market.
The People's Bank of China today said it had issued 10 billion yuan of one-year repurchase agreements at a yield of 3.57 percent, 1.07 basic points lower than a week earlier, which raised expectations that China may lower the RRR from a record high of 21.5 percent.
The country's inflation for October may slip to 5.6 percent from 6.1 percent in September, according to a note by Sinolink Securities Co today.
The downward trend in prices might continue this month with expected inflation dropping to 4.5 percent for November, Lu said. However, it is likely to bounce back in December in anticipation of the Chinese New Year spending spree, according to the note.
But analysts at Bank of Communications cautioned today that the pace of inflation falls might be limited given that labor costs were bound to rise for a long term while prices of commodities were still running at high levels.
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