Stocks News
- Stocks sink as data fuel tightening fears
Date: 26-Oct-2007 Sources: (Shenzhen Daily)
THE country's strong third-quarter economic data fueled expectations of another policy tightening, driving the benchmark index Thursday to its biggest single-day loss since early July.
But traders said the sharp fall in share prices was long overdue following the market's recent rallies and may not necessarily signal the beginning of a longer-term bear market.
The benchmark Shanghai Composite Index ended down 4.8 percent at 5,562.39, off an intraday low of 5,546.04. The index posted its biggest single-day percentage fall since July 5, when it slumped 5.3 percent.
The Shenzhen Composite Index fell 5.4 percent to 1,374.12.
Traders said they still expect the Shanghai index to hold above the immediate psychological support of 5,500 Friday because of buying interest at that level.
'A domino effect to sell took place today. Rumors are swirling that after today's release of robust figures, the government won't only hand over rate hikes this time. There may be other measures the market has not known before,'said Xu Yinhui with Guotai Junan Securities.
Official data released earlier Thursday showed China's third-quarter gross domestic product grew 11.5 percent from a year earlier, slower than the 11.9 percent expansion in the second quarter. The consumer price index rose 6.2 percent in September from a year earlier, slowing from the 6.5 percent increase in August.
Despite signs of a slightly cooling economy, the latest figures still suggest the likelihood of at least another interest rate hike by the end of this year and fresh administrative measures to rein in an investment boom and curb fast credit growth.
Sponsor Results:
