Stocks News
- Shares sink on bond, policy jitters
Date: 29-Jun-2007 Sources: (Shenzhen Daily)
STOCKS tumbled 4.03 percent Thursday out of concern that large sales of government bonds later this year could suck funds from the market and on fears the central bank might soon hike interest rates.
The Shanghai Composite Index suffered its biggest percentage fall in three weeks to close at 3,914.204 points, just marginally off the day's low of 3,912.814.
Losing Shanghai stocks overwhelmed gainers by 773 to 74. Turnover in Shanghai A shares was modest at 126.4 billion yuan (US$16.6 billion), little changed from Wednesday, suggesting many investors were staying away from the market.
The government said Wednesday that it planned to issue about US$200 billion worth of yuan bonds to finance purchases of foreign exchange from the central bank for a new overseas investment agency.
Depending on how the bond sales are conducted, they could soak up money that would otherwise have gone into stocks.
Many investors also expect an interest rate hike in coming weeks after data released this month showed inflation rising. The central bank often makes policy announcements after the market closes Fridays, so nervous investors dumped stocks as the weekend approached.
Sponsor Results:
