Chinese stocks wilt to year low
Written on April 20, 2008
SHANGHAI–Chinese stocks sank to their lowest level in more than a year yesterday as an investor funk deepened over the country’s economic prospects and monetary policy.
The Shanghai composite index tumbled 128.07 points, or 4 per cent, to 3,094.67, the lowest close since March 23, 2007.
The benchmark index has dropped 41 per cent since the beginning of the year and 49.5 per cent from the record high of 6,124.04 in mid-October.
Market heavyweight PetroChina fell 5 per cent yesterday, dropping below the initial public offering price for the first time since the shares began trading in October.
"The main reason for the protracted decline is disappointment over market policy," said Gui Haoming, an analyst at Shenyin & Wanguo Securities.
"Both retail and institutional investors are deeply worried about the economy and continued monetary tightening, and there haven’t been any measures to break the market’s fall."
The latest selling followed the release earlier this week of data showing that China’s economy grew at a 10.6 per cent annualized pace in the first three months of the year.
Inflation, meanwhile, moderated slightly in March, to 8.3 per cent from a nearly 12-year high of 8.7 per cent the month before.
This might seem confidence-inspiring, but the government’s continued pledges to maintain tight credit to help fight inflation have dampened buying sentiment, analysts said.
Airline stocks tumbled as crude oil set another record in New York http://easy-quick-payday-loans.com freecreditscore. Light, sweet crude for May delivery closed at $116.39 (U.S.), up $1.83. China Southern Airlines fell 9.8 per cent, Air China dropped the 10 per cent daily limit and China Eastern Airlines descended 10 per cent.
In Hong Kong, sharp gains in heavyweight China Mobile failed to lift the broad market amid concerns about weakness on the mainland.
Hong Kong’s Hang Seng index declined 61.18 points to 24,197.78, down 1.9 per cent for the week and 13 per cent since the start of the year. Analysts expect further weakness as the index tracks declines in China’s bourses.
Filed in: money.