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Stocks post biggest drop in 10 days
By Ye Zhen |
July 8, 2013, Monday
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Online Edition
Online Edition
SHANGHAI stocks posted the biggest decline in ten days as a weak economy pinned down market performance while jittery investors worried the looming reboot of new offerings and the resumption of trading in Treasury bond futures will divert funds from the equity market.
The key Shanghai Composite Index slumped 48.93 points, or 2.44 percent, to 1,958.27, the biggest daily decline since June 24, when the barometer plunged 5.30 percent amid China's worst liquidity crunch in a decade. Turnover stood at a weak level of 67.2 billion yuan (US$11 billion) at the trading close.
"Although the liquidity squeeze has been easing, the faltering economic recovery will continue to weigh on the market," said Zhang Yanbing, an analyst with Zheshang Securities.
"The uncertainty over the reboot of new share offerings and the resumption of trading in Treasury bond futures also dampens investor sentiment," Zhang added.
The market declined amid reignited speculation that China's securities regulator will restart approvals of initial public offerings as soon as the end of July after it releases the revised rules on IPO reforms.
As of July 4, 746 companies were waiting for approvals from the China Securities Regulatory Commission to launch IPOs on the Shanghai and Shenzhen bourses, data from the country's top securities regulator showed.
Concerns about an outflow of funds from the stock market also emerged after the CSRC said after the market closed on Friday that the China Financial Futures Exchange has received the green light from the regulator to resume trading of Treasury bond futures after an 18-year suspension in an effort to promote liberalization of interest rates.
Coal miners, cement producers and steelmakers were among the biggest losers.
Wintime Energy Co dropped 6.3 percent to 5.54 yuan. China Shenhua Energy Co, the nation's biggest coal producer, shed 3.6 percent to 15.67 yuan.
Shaanxi Qinling Cement (Group) Co dropped 6.5 percent to 4.06 yuan. Baoshan Iron and Steel Co, China's largest listed steel mill, fell 2 percent to 3.87 yuan. Inner Mongolia Baotou Steel Union Co declined 4.4 percent to 3.87 yuan.
Gold stocks declined as gold prices fell for a third session today. Zijin Mining Group Co, the nation's largest gold producer, lost 4.1 percent to 2.56 yuan. Shandong Gold Mining Co plunged 9.4 percent to 21.41 yuan.
The key Shanghai Composite Index slumped 48.93 points, or 2.44 percent, to 1,958.27, the biggest daily decline since June 24, when the barometer plunged 5.30 percent amid China's worst liquidity crunch in a decade. Turnover stood at a weak level of 67.2 billion yuan (US$11 billion) at the trading close.
"Although the liquidity squeeze has been easing, the faltering economic recovery will continue to weigh on the market," said Zhang Yanbing, an analyst with Zheshang Securities.
"The uncertainty over the reboot of new share offerings and the resumption of trading in Treasury bond futures also dampens investor sentiment," Zhang added.
The market declined amid reignited speculation that China's securities regulator will restart approvals of initial public offerings as soon as the end of July after it releases the revised rules on IPO reforms.
As of July 4, 746 companies were waiting for approvals from the China Securities Regulatory Commission to launch IPOs on the Shanghai and Shenzhen bourses, data from the country's top securities regulator showed.
Concerns about an outflow of funds from the stock market also emerged after the CSRC said after the market closed on Friday that the China Financial Futures Exchange has received the green light from the regulator to resume trading of Treasury bond futures after an 18-year suspension in an effort to promote liberalization of interest rates.
Coal miners, cement producers and steelmakers were among the biggest losers.
Wintime Energy Co dropped 6.3 percent to 5.54 yuan. China Shenhua Energy Co, the nation's biggest coal producer, shed 3.6 percent to 15.67 yuan.
Shaanxi Qinling Cement (Group) Co dropped 6.5 percent to 4.06 yuan. Baoshan Iron and Steel Co, China's largest listed steel mill, fell 2 percent to 3.87 yuan. Inner Mongolia Baotou Steel Union Co declined 4.4 percent to 3.87 yuan.
Gold stocks declined as gold prices fell for a third session today. Zijin Mining Group Co, the nation's largest gold producer, lost 4.1 percent to 2.56 yuan. Shandong Gold Mining Co plunged 9.4 percent to 21.41 yuan.
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