Stocks News
- Chinese shares fall 2.14% on concerns about liquidity
Date: 5-Jul-2007 Sources: (Xinhua Online)
Chinese share prices fell on Wednesday amid government concern about excessive liquidity in the stock market after a two-day rebound from previous losses.
The benchmark Shanghai Composite Index went down 2.14 percent, or 83.55 points, to close at 3816.17 points on a daily transaction volume of 73.7 billion yuan (9.7 billion U.S. dollars).
The key index nosed to a low of 3,800.27 points in the afternoon following fluctuations in the morning session before creeping up again.
The Component Index on the smaller Shenzhen Stock Exchange fell 251.92 points, or 1.97 percent, to end the day at 12,509.14 points on thinner turnover of 41.4 billion yuan.
China's Monetary Policy Commission of the People's Bank of China on Tuesday advised the central bank to pursue a prudent monetary policy but tighten money supply 'moderately' to keep the economy stable.
The commission emphasized the importance of cautious credit and investment growth to the country's stable economic growth, and said the country's monetary policies need to be coordinated with fiscal, industrial and trade policies as well as financial supervision.
The enthusiasm of investors seems to have been dampened by the government's earlier pledge to rein in liquidity.
Newly-opened A-share accounts on the Shanghai and Shenzhen bourses dropped below 100,000 on Monday, the lowest figure since the eight percent market slump on Feb. 27, according to statistics from the China Securities Depository and Clearing Co.
On Wednesday, heavyweight Industrial and Commercial Bank dropped 1.15 percent to close at 5.14 yuan. The Bank of China fell 1.57 percent to 5.02 yuan.
The Hushen 300 Index, which tracks 300 companies on the Shanghai and Shenzhen stock exchanges, closed at 3,743.58 points, down 88.65 points, or 2.3 percent, from the previous day's trading.
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