Stocks inch down on commodity weakness
By Lydia Chen |
May 7, 2011, Saturday
|
Print Edition
Print Edition
THE Shanghai stock market fell yesterday, weighed down by resources shares after the prices of some commodities plunged on international markets.
The Shanghai Composite Index lost 0.3 percent to 2,863.89. The gauge fell 1.6 percent this week, a third weekly loss and the longest weekly losing streak since December.
Coal, steel, oil and nonferrous metal producers led the decline following steep price drops of some commodities. Oil fell nearly US$10 on Thursday to close below US$100 per barrel for the first time since mid-March. Silver lost 8 percent to settle at US$34.41. Its nearly US$16 off its high of US$50, reached last week. Gold fell 2.3 percent to US$1,474.90 an ounce.
PetroChina, the country's biggest oil producer and the biggest component on the market, lost 2.2 percent to 11.15 yuan. Yanzhou Coal Mining Co shed 2.9 percent to 31.59 yuan.
"The plunge in commodities is not the real reason the market dropped today," said Huang Dongsheng, an analyst at Guodu Securities Co. "Investors fear the ability to make profits will be hampered given that companies have large inventories as the prices of basic materials are falling."
"A weak market like the one we are having now will always respond like this to any negative news," Huang said, adding that the market may fall to as low as 2,800 points next week.
Developers also dragged the market lower as they are expected to shoulder the brunt of new tightening measures soon, Huang said.
The Shanghai Composite Index lost 0.3 percent to 2,863.89. The gauge fell 1.6 percent this week, a third weekly loss and the longest weekly losing streak since December.
Coal, steel, oil and nonferrous metal producers led the decline following steep price drops of some commodities. Oil fell nearly US$10 on Thursday to close below US$100 per barrel for the first time since mid-March. Silver lost 8 percent to settle at US$34.41. Its nearly US$16 off its high of US$50, reached last week. Gold fell 2.3 percent to US$1,474.90 an ounce.
PetroChina, the country's biggest oil producer and the biggest component on the market, lost 2.2 percent to 11.15 yuan. Yanzhou Coal Mining Co shed 2.9 percent to 31.59 yuan.
"The plunge in commodities is not the real reason the market dropped today," said Huang Dongsheng, an analyst at Guodu Securities Co. "Investors fear the ability to make profits will be hampered given that companies have large inventories as the prices of basic materials are falling."
"A weak market like the one we are having now will always respond like this to any negative news," Huang said, adding that the market may fall to as low as 2,800 points next week.
Developers also dragged the market lower as they are expected to shoulder the brunt of new tightening measures soon, Huang said.
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