Stocks fall on mortgage loan move by banks
By Pan Xiaoyi |
August 6, 2010, Friday
|
Print Edition
Print Edition
SHANGHAI'S stock market ended lower yesterday, led by property developers, on media reports that banks had been asked to conduct stress tests to see whether they could absorb a fall of up to 60 percent in home prices.
The benchmark Shanghai Composite Index dipped 0.67 percent, or 17.76 points, to close at 2,620.76. Turnover rose to 115.4 billion yuan (US$16.9 billion) from Wednesday's 112.8 billion yuan.
Reports said the China Banking Regulatory Commission had initiated a new round of stress tests in key cities after completing the first round, which showed lenders could sustain the impact of a fall of 30 percent in home prices. Banks were also reportedly ordered to stop mortgage loans to third-home buyers in Shanghai, Beijing, Shenzhen and Hangzhou.
"Property developers lost on speculation that more severe measures to curb housing prices may be unveiled," said Wan Bing, an analyst with GF Securities Co. "Investors are concerned that the real estate sector will have an impact on a range of industries."
Gemdale Corp lost 2.8 percent to 6.89 yuan. Poly Real Estate Co fell 4.5 percent to 12.50 yuan. Shanghai Shimao Corp retreated 2.8 percent to 13.44 yuan.
Heavyweights and blue chips under-performed. PetroChina, the biggest component of the index, was down 1.2 percent 10.55 yuan while Sinopec, Asia's largest oil refiner, eased 1.6 percent to 8.56 yuan.
China Merchants Bank Co fell 2 percent to 14.03 yuan. Shanghai Pudong Development Bank Co slipped 1.8 percent to 14.53 yuan.
Inflation-resistant consumer-related stocks bucked the downward trend. Yinchuan Xinhua Department Store Co surged by the 10 percent daily cap to 35.70 yuan. Shanghai New World Co jumped 4.6 percent to 13.74 yuan.
The benchmark Shanghai Composite Index dipped 0.67 percent, or 17.76 points, to close at 2,620.76. Turnover rose to 115.4 billion yuan (US$16.9 billion) from Wednesday's 112.8 billion yuan.
Reports said the China Banking Regulatory Commission had initiated a new round of stress tests in key cities after completing the first round, which showed lenders could sustain the impact of a fall of 30 percent in home prices. Banks were also reportedly ordered to stop mortgage loans to third-home buyers in Shanghai, Beijing, Shenzhen and Hangzhou.
"Property developers lost on speculation that more severe measures to curb housing prices may be unveiled," said Wan Bing, an analyst with GF Securities Co. "Investors are concerned that the real estate sector will have an impact on a range of industries."
Gemdale Corp lost 2.8 percent to 6.89 yuan. Poly Real Estate Co fell 4.5 percent to 12.50 yuan. Shanghai Shimao Corp retreated 2.8 percent to 13.44 yuan.
Heavyweights and blue chips under-performed. PetroChina, the biggest component of the index, was down 1.2 percent 10.55 yuan while Sinopec, Asia's largest oil refiner, eased 1.6 percent to 8.56 yuan.
China Merchants Bank Co fell 2 percent to 14.03 yuan. Shanghai Pudong Development Bank Co slipped 1.8 percent to 14.53 yuan.
Inflation-resistant consumer-related stocks bucked the downward trend. Yinchuan Xinhua Department Store Co surged by the 10 percent daily cap to 35.70 yuan. Shanghai New World Co jumped 4.6 percent to 13.74 yuan.
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