Stocks News
- Chinese shares lower on interest rates hike expectation
Date: 19-Nov-2007 Sources: (Xinhua Online)
BEIJING, Nov. 16 (Xinhua) -- Chinese share prices continued to fall on Friday amid expectations of the year's sixth interest rate hike, which investors believe is imminent.
The consensus is that the central bank would raise interest rates over the weekend to tame inflation, Hualin Securities said.
The consumer price index (CPI), a major gauge of inflation, rebounded to 6.5 percent in October from 6.2 percent in September. The October CPI matched the 11-year monthly record, which was set in August.
Strong urban fixed asset investment data released on Friday further supported expectations of an interest rate hike, analysts said.
Investment in construction, factory and other urban fixed assets rose 26.9 percent in the first ten months, 0.5 percentage points higher than the Jan.-Sept. figure, the National Bureau of Statistics said Friday.
The benchmark Shanghai Composite Index, which covers both A and B shares, slipped 49 points, or 0.91 percent, to 5,316.27. On Thursday, it fell 0.88 percent to 5,365.27, after a 4.94 percent gain in the previous session.
The Shenzhen Component Index on the smaller Shenzhen Stock Exchange dropped 368.64 points on Friday, or 2.16 percent, to 16,728.26.
The Hushen 300 Index, accounting for 60 percent of the nation's stock market value, was down 73.45 points, or 1.45 percent, to 5,007.66.
Combined turnover on the two bourses contracted sharply to 94 billion yuan (12.6 billion U.S. dollars) from 122 billion in the previous session.
The declines in Chinese shares followed Wall Street's fall overnight and mirrored the Hong Kong market's loss on Friday.
Overnight, the Dow Jones Industrial Average fell 120.96 points, or 0.91 percent, to 13,110.05. On Friday, Hong Kong's benchmark Hang Seng Index plunged 1,136.78 points, or 3.95 percent, to 27,614.43 .
Wan Bing, an analyst at Guangfa Securities, said stocks may continue to fall, since banking and steel issues were in the initial stages of a correction.
Banks and brokerages led the market loss on Friday.
All banks except Bank of Ningbo fell. Heavyweights Industrial and Commercial Bank of China slid 1.44 percent to 8.24 yuan and Bank of China lost 0.98 percent to 7.08 yuan. Bank of Ningbo, however, rose 1.16 percent to 18.30 yuan.
Shenzhen Development Bank shed 4.69 percent to 38.60 yuan. Citic Securities, the nation's largest brokerage, plunged 3.02 percent to 99.61 yuan.
Steel stocks were also major losers. Baoshan Iron and Steel, the nation's largest steel producer, was down 2.31 percent to 15.24 yuan.
The A share index on the Shanghai Stock Exchange fell 51.44 points, or 0.91 percent, to 5,581.43 and the B share index fell 3.15 points, or 0.92 percent, to 337.53.
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