Stocks News
- Stocks slide below 5000
Date: 23-Nov-2007 Sources: (People's Daily)
Jittery investors keen to unload shares amid growing uncertainties pushed the mainland stock market down sharply yesterday to the lowest level in three months.
The Shanghai Composite Index slid 4.41 percent, or 230.06 points, to close at 4984.16; it has lost 16 percent this month. Losers outnumbered gainers by 782 to 58 yesterday.
The Shenzhen Component Index was off 4.77 percent, or 798.82 points, to close at 15949.36.
'Many investors were trying to sell their holdings as they were worried about further declines,' said Zhu Haibin, an analyst at Essence Securities.
Analysts said that the tightening of bank credit could create cash flow problems for some highly-geared companies, prompting them to convert part of their formally non-tradable shares for cash.
They added that expectation of further interest rate hikes and the imminent launch of stock index futures also dampened investors' sentiment.
The slump in a wide range of commodity prices in the international market has triggered a selling of stocks in the raw materials sectors, such as non-ferrous metals.
Real estate companies also took a hit after the government reaffirmed its determination to cool down the property market.
Further straining liquidity, large amounts of capital has flowed into the subscription of China Railway's initial public offering, which is reported to have attracted over 3.3 trillion yuan ($445 billion), the historic high slightly surpassing that of PetroChina.
Investor sentiment remains low, as indicated by the big drop in new daily A-share accounts opening, which averaged 140,538 in November, compared with 190,000 the month before.
Mutual funds also began to cool down. A new fund managed by China Southern Management Co Ltd attracted only 46 percent subscription on its debut on Tuesday.
'The expectation of a slowdown in listed companies' earnings in the fourth quarter, triggered by the expected decrease of stock investment gains, will have a negative effect on market sentiment,' said Guo Yanlin, an analyst at Shanghai Securities.
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