Chinese shares slump heavily on weak overseas market

June 27th, 2008 - 5:48 pm ICT by IANS  

Xinhua
Beijing, June 27 (Xinhua) Weak overseas market sent Chinese shares plummeting with the Shanghai and Shenzhen bourses shedding more than five percent of their values. The benchmark Shanghai Composite Index trimmed 153.42 points, or 5.29 percent, to close at 2,748.43 points. The Shenzhen Component Index dropped 563.45 points or 5.63 percent to 9,436.21.

Combined turnover on the two bourses shrank to 97.2 billion yuan (around $14.17 billion) from 108.6 billion yuan on the previous trading day.

Oil caps were deeply hurt by the rising international crude oil price, said Wan Bing, a Guangdong-based GF Securities analyst. PetroChina, the country’s largest oil producer, and top oil refiner Sinopec plunged 3.47 percent to 15 yuan and 9.12 percent to 10.27 yuan respectively.

Securities shares fell on the news of Everbright Securities’ coming initial public offering (IPO).

Market watchdog China Securities Regulatory Commission (CSRC) said late Thursday it would review IPO applications from the Everbright Securities and China South Locomotive and Rolling Stock Corp. June 30.

According to the draft prospectus, the two companies are scheduled to raise about 20 billion yuan, which would further drain liquidity from the sluggish market, dealers said.

CITIC Securities, the country’s largest listed brokerage firm, lost 8.33 percent to 24.55 yuan per share and Shanghai-based Haitong Securities was down 6.11 percent to 24.12 yuan.

The market is also concerned about a possible interest rate rise during the weekend, which may have unfavorable effects on the A-share market, said Zhang Dongyun, a Haitong Securities analyst.

A report by Guotai Jun’an Securities said that one should not be over-pessimistic about the market, believing that the country would loosen its tight monetary policy in the third quarter of this year, which would create more investment opportunities.

The Shanghai Composite Index may fluctuate between 2,500 and 3,700 points in the second half of this year, said the report.

Losing shares outnumbered gainers by 791 to 35 in Shanghai and by 675 to 17 in Shenzhen on Friday.

The benchmark Shanghai Composite Index has shrunk more than 55 percent from its peak in mid-October last year.
Xinhua

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