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Stocks drop as new data sours investor sentiment
By Lu Nengneng |
January 13, 2012, Friday
|
Online Edition
Online Edition
SHANGHAI'S key stock index dropped today as investor sentiment soured on the release of lower-than-expected inflation data and the outflow of foreign capital.
The Shanghai Composite Index shed 1.34 percent to end at 2,244.58 points, trimming the weekly gain to 3.75 percent. It was the first winning week since November.
China's Consumer Price Index, a key gauge of inflation, jumped 5.4 percent annually last year, which was above the 4 percent target set by the central government and dimmed the prospect of monetary policy easing.
Property developers led the retreat as their first-stage repayment of real estate investment trusts, due in February and March, may put further pressure on their cash flows. According to Guotai Junan Securities, the industry needs to repay 175.8 billion yuan (US$27.9 billion) this year.
Poly Real Estate lost 1.06 percent to 10.28 yuan. Gemdale Group tumbled 2.3 percent to 5.09 yuan. China Merchants Property Development dropped 1.64 percent to 18 yuan.
Banks also fell after the People's Bank of China announced today that yuan funds accumulated from foreign exchange purchases had dropped for a third month in December by 100 billion yuan.
The continued outflow of foreign capital further drained the lender's liquidity while the central bank hasn't announced another reserve requirement ratio cut as expected. China CITIC Bank slid 0.94 percent to 4.23 yuan. China Everbright Bank eased 0.34 percent to 2.94 yuan.
The Shanghai Composite Index shed 1.34 percent to end at 2,244.58 points, trimming the weekly gain to 3.75 percent. It was the first winning week since November.
China's Consumer Price Index, a key gauge of inflation, jumped 5.4 percent annually last year, which was above the 4 percent target set by the central government and dimmed the prospect of monetary policy easing.
Property developers led the retreat as their first-stage repayment of real estate investment trusts, due in February and March, may put further pressure on their cash flows. According to Guotai Junan Securities, the industry needs to repay 175.8 billion yuan (US$27.9 billion) this year.
Poly Real Estate lost 1.06 percent to 10.28 yuan. Gemdale Group tumbled 2.3 percent to 5.09 yuan. China Merchants Property Development dropped 1.64 percent to 18 yuan.
Banks also fell after the People's Bank of China announced today that yuan funds accumulated from foreign exchange purchases had dropped for a third month in December by 100 billion yuan.
The continued outflow of foreign capital further drained the lender's liquidity while the central bank hasn't announced another reserve requirement ratio cut as expected. China CITIC Bank slid 0.94 percent to 4.23 yuan. China Everbright Bank eased 0.34 percent to 2.94 yuan.
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