Stocks News
- Stocks post biggest weekly loss in a decade
Date: 12-Nov-2007 Sources: (Shenzhen Daily)
THE mainland's main stock index closed Friday with a weekly loss of 8 percent, its biggest weekly drop since May 1997, as investors retreated from the market because of worries about government policy and heavy supply of new shares.
The Shanghai Composite Index ended down 0.27 percent at 5,315.540 points, its lowest finish since Sept. 14, after moving between positive and negative territory. On Thursday, it plunged 4.85 percent, its largest daily drop in four months. The Shenzhen Composite Index fell 1.5 percent to 1,300.78.
Losing Shanghai stocks outnumbered gainers Friday by 499 to 336. Turnover in Shanghai A shares was a very small 79.9 billion yuan (US$10.8 billion), near a 15-week low.
A bull run in domestic stocks pushed the index up 129 percent between the start of this year and a record intra-day high of 6,124 points in mid-October.
But since then investors have been discouraged by tightening monetary policy, authorities' curbs on fund flows into stocks, a flood of new share offers, high valuations and sagging foreign stock markets.
'The market will continue consolidating for weeks. Nobody knows when it will reach a short-term floor, so nobody dares to buy much now,'said Xu Yinghui, analyst at Guotai Junan Securities.
Friday's close left the index down 13 percent from its peak, although it is still 99 percent higher than its level at the start of this year.
Fund managers and analysts generally think the market's long-term uptrend will resume early next year. Corporate profit growth is expected to slow but remain strong, and though authorities have been seeking to cool the market, they do not want to cause a crash.
In the short term, however, few traders see room for a major rebound.
'The index is unlikely to hit a new record this year, though it will in 2008,'said Wu Lei, analyst at CITIC-Kington Securities.
'The outlook for the future is good, but many investors have lost a lot in the present and they cannot wait for the future to arrive.'
Wu and some others said the index was likely in coming weeks to drift down to technical support around 5,000 points, the objective of a bearish right triangle triggered Thursday.
'There is talk that to prevent the stock markets from skyrocketing before the launch of the stock index futures, the government will unveil other tightening measures in addition to the usual fare of rate hikes,'said Li Xianming, a strategist at Ping An Securities.
Some blue chips partially recovered Friday. Sinopec, which plunged 7.10 percent Thursday, jumped Friday afternoon to close 3.87 percent higher at 23.36 yuan in response to a 5 percent gain by its Hong Kong-listed H share.
Goldman Sachs raised its rating for the oil refiner's H share to buy from neutral, though it only lifted the A share to neutral from sell.
Bank of Communications climbed 4.59 percent to 15.50 yuan and China Minsheng Banking Corp. gained 4.23 percent to 17.51 yuan after domestic media reported they would be among the first group of settlement banks for the country's planned stock index futures trade.
Property shares were boosted by last week's faster yuan appreciation against the U.S. dollar, with Shanghai Xinmei Real Estate up 6.72 percent to 8.42 yuan.
But many industrial stocks stayed weak. PetroChina, which soared in its debut last Monday, edged down 0.03 percent Friday to 38.18 yuan.
Sponsor Results:
