Stocks plunge in loan-clamp fallout
By Ding Yining |
April 20, 2010, Tuesday
|
Print Edition
Print Edition
THE Shanghai stock market posted its biggest daily decline in almost eight months yesterday, falling almost 5 percent to below 3,000 points.
The retreat was led by property shares that plummeted after the State Council, China's Cabinet, on the weekend announced stricter rules for house mortgages, bringing concerns of tighter liquidity and a possible shift in macroeconomic policies.
About 865.6 billion yuan (US$126.81 billion) in market value was wiped off in Shanghai compared with Friday's close.
The Shanghai Composite Index slumped 4.79 percent, or 150 points, to close at 2,980.30 points on turnover of 156.4 billion yuan.
A total of 842 shares dropped, 33 gained and 47 stayed unchanged.
The State Council on Saturday told banks to suspend loans to borrowers with two or more houses as well as restrict lending to buyers who can't provide tax certificates or proof of social security contributions.
"These are most draconian measures for the property market," Ma Jun, Deutsche Bank AG China's chief economist, wrote in research note yesterday.
Poly Real Estate Group dived 5.36 percent to 17.65 yuan.
China Vanke sank 4.76 percent to 8.61 yuan and Shanghai Lujiazui Finance & Trade Zone Development fell 4.36 percent to 21.92 yuan.
"It's likely there will be more measures to curb the property market, which may involve tax," Orient Securities wrote in a research report.
Banks also suffered. Industrial & Commercial Bank of China, the nation's biggest lender, lost 4.90 percent to 4.66 yuan.
Bank of Communications sank 6.36 percent to 7.65 yuan, China Merchants Bank retreated 6.37 percent to 14.69 yuan and Shanghai Pudong Development Bank slumped 6.80 percent to 20.56 yuan.
The new stock-index futures also plummeted after Friday's gain.
The May futures contract on the CSI 300 Index sank 6.81 percent to 3,197.4 points. Turnover was 109,733 lots, almost double that of Friday's.
"The launch of index futures provided new instruments for short sellers and, in return, dragged down the Shanghai Composite Index," said Zhang Qi, an analyst with Haitong Securities.
"The market will remain weak in coming days as yesterday's slump hit investors' confidence but heavily weighted blue chips will be better off with improving financial figures and sales results for the first quarter."
The Dow Jones Industrial Index lost 1.13 percent to 11,018.66 on Friday and the Standard & Poor's 500 Index dropped 1.61 percent to 1,192.13 points after the United States Securities and Exchange Commission launched legal action against finance giant Goldman Sachs.
Commodity shares also dragged down the Shanghai index yesterday as investors were discouraged from taking risks as the Goldman Sachs case is set to unfold.
Aluminum Corporation of China Ltd sank 5.90 percent to 12.28 yuan, Jiangxi Copper retreated5.51 percent to 34.84 yuan and Yunnan Copper dipped 6.65 percentto 26.97 yuan.
"The market will be flat in the near future as the impact of the central government's stricter property policies will continue, while sectors, including pharmaceuticals and telecommunication companies, may have better chances," China Inter-national Capital Co wrote in a research report yesterday.
The retreat was led by property shares that plummeted after the State Council, China's Cabinet, on the weekend announced stricter rules for house mortgages, bringing concerns of tighter liquidity and a possible shift in macroeconomic policies.
About 865.6 billion yuan (US$126.81 billion) in market value was wiped off in Shanghai compared with Friday's close.
The Shanghai Composite Index slumped 4.79 percent, or 150 points, to close at 2,980.30 points on turnover of 156.4 billion yuan.
A total of 842 shares dropped, 33 gained and 47 stayed unchanged.
The State Council on Saturday told banks to suspend loans to borrowers with two or more houses as well as restrict lending to buyers who can't provide tax certificates or proof of social security contributions.
"These are most draconian measures for the property market," Ma Jun, Deutsche Bank AG China's chief economist, wrote in research note yesterday.
Poly Real Estate Group dived 5.36 percent to 17.65 yuan.
China Vanke sank 4.76 percent to 8.61 yuan and Shanghai Lujiazui Finance & Trade Zone Development fell 4.36 percent to 21.92 yuan.
"It's likely there will be more measures to curb the property market, which may involve tax," Orient Securities wrote in a research report.
Banks also suffered. Industrial & Commercial Bank of China, the nation's biggest lender, lost 4.90 percent to 4.66 yuan.
Bank of Communications sank 6.36 percent to 7.65 yuan, China Merchants Bank retreated 6.37 percent to 14.69 yuan and Shanghai Pudong Development Bank slumped 6.80 percent to 20.56 yuan.
The new stock-index futures also plummeted after Friday's gain.
The May futures contract on the CSI 300 Index sank 6.81 percent to 3,197.4 points. Turnover was 109,733 lots, almost double that of Friday's.
"The launch of index futures provided new instruments for short sellers and, in return, dragged down the Shanghai Composite Index," said Zhang Qi, an analyst with Haitong Securities.
"The market will remain weak in coming days as yesterday's slump hit investors' confidence but heavily weighted blue chips will be better off with improving financial figures and sales results for the first quarter."
The Dow Jones Industrial Index lost 1.13 percent to 11,018.66 on Friday and the Standard & Poor's 500 Index dropped 1.61 percent to 1,192.13 points after the United States Securities and Exchange Commission launched legal action against finance giant Goldman Sachs.
Commodity shares also dragged down the Shanghai index yesterday as investors were discouraged from taking risks as the Goldman Sachs case is set to unfold.
Aluminum Corporation of China Ltd sank 5.90 percent to 12.28 yuan, Jiangxi Copper retreated5.51 percent to 34.84 yuan and Yunnan Copper dipped 6.65 percentto 26.97 yuan.
"The market will be flat in the near future as the impact of the central government's stricter property policies will continue, while sectors, including pharmaceuticals and telecommunication companies, may have better chances," China Inter-national Capital Co wrote in a research report yesterday.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
