Sunday, December 30, 2007

Chinese School - Record-high CPI triggers 4.5% plunge of China stocks

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BIZCHINA / Index & Statistics

Record-high CPI triggers 4.5% plunge of China stocks

By Li Zengxin (chinadaily.com.cn)
Updated: 2007-09-11 16:47

The announcement of the highest consumer price index (CPI) figure in 11
years and the issuance of another batch of special treasury bonds
totaling 200 billion yuan finally triggered a wave of panic selling today
resulting in the largest single-day drop in three months.

Other factors for the slump also included a series of previous
"discouraging" factors that had failed to affect the market heavily
through yesterday.

The Shanghai Composite Index, after hitting a temporary high in the
morning, plummeted 241.32 points or 4.51 percent by close, the deepest
plunge in the post-May 30 period after June 4 when the benchmark index
fell 330 points in a single day.

Total turnover of the stocks in the major indices was 259.2 billion yuan,
higher than yesterday's figure.

Shanghai Composite Index
Source: sina.com.cn

The benchmark Shanghai index opened higher at 5,362.94 and seemed
resistant to the CPI release at first, by hitting the highest 5,395.04
and fluctuating in short ranges without forming a clear trend in the
morning. In the afternoon, however, it began sliding and lost another 130
points in less than 30 minutes just before the close to hit the lowest at
5,093.92. A slight rebound near close could not save the market from a
losing day.

Of the A shares listed in Shanghai, only 48 went up, 62 ended flat but as
many as 732 closed down. The Industrial and Commercial Bank of China,
with largest trading volume, fell 5.6 percent to further drag down the
index. China COSCO Holdings, with the largest transaction value, rose an
astounding 10 percent to 38.46 yuan, leading today's few gainers.

Shenzhen Component Index
Source: sina.com.cn

The Shenzhen Component Index, tracking the smaller Shenzhen Stock
Exchange, opened higher at 17,926.60 but closed 789.09 points or 4.4
percent?down?to 17129.39. Mapping out a similar trend to its Shanghai
counterpart, the index went through the day within a range of between
17,088.67 and 18,064.15.

Of the A shares, 37 climbed up, 536 fell and 66 remained unchanged. Large
traders TCL and China Vanke were both down about 5 percent.

(For more biz stories, please visit Industry Updates)

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