Stocks News
- Chinese share prices tumble 4.92%
Date: 1-Feb-2007 Sources: (Xinhua Online)
Chinese share prices closed sharply lower on Wednesday as the benchmark Shanghai Composite Index tumbled 4.92 percent, or 144.22 points, to close at 2,786.34 points.
The index, which covers both A- and B-shares, even touched the lowest level of 2,766.75 points of the day with an turnover of 86.14 billion yuan (11.07 billion U.S. dollars).
Analysts said the sharp decline of the index came amid bubble fears and speculations that the government would unveil more measures to cool down the equity market.
The Shanghai A-share index lost 4.92 percent to end at 2,927.83 points, while the B-share index was down 5.48 points to finish at 160.68 points.
The component index of the smaller Shenzhen Stock Exchange fell 7.62 percent, or 629.40 points, to finish at 7,632. 94 on turnover of 43.71 billion yuan (5.62 billion U.S. dollars).
Share of China Minsheng Bank shed 9.28 percent to close at 12.02 yuan, while Huaxia Bank fell the daily limit of 10 percent to finish at 10.24 yuan.
The heavyweights Industrial and Commercial Bank of China lost 3.09 percent to 5.01 yuan, and China Life tumbled 4.40 percent to 38.21 yuan.
Stock of the China Petroleum and Chemical Corporation, known as Sinopec, fell 8.77 percent to finish at 9.68 yuan, and China Unicom lost 9.25 percent to 4.61 yuan.
The property developers were also among the day's heavy losers as the Shanghai property index tumbled 4.80 percent to 2,664.74 points.
Zhou Xiaochuan, governor of the People's Bank of China, said recently that the central bank would closely watch the housing prices.
Property giants China Vanke shed 9.41 percent to close at 15.31 yuan in its A-shares in Shenzhen, and Shimao Property dropped 7.95 percent to 5.21 yuan.
Analysts said that investors feared more measures to cool down the market would come out soon after the China Banking Regulatory Commission have banned commercial banks from giving loans for stock investment.
Cheng Siwei, vice chairman of the Standing Committee of the National People's Congress, warned on Tuesday that the bubble was developing in the stock market and people were rather irrational when investing in the bullish market.
Gu Jie, an analyst at Hualin Securities, said that investors should sell certain number of shares to lock in profits in a bid to prepare for possible risks from the huge market fluctuation.
Ding Shengyuan, of Galaxy Securities, said the sharp drop resulted from profits-taking from heavy trading as investors had huge divergence on the future trend of the stock market.
'The decline is in expectation after the government's latest efforts to reduce excessive liquidity, and the share prices are very likely to rebound on Thursday,' Zhu Guozheng, an analyst at Huizheng Caijing, a stock investment consulting agency.
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