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BIZCHINA / Index & Statistics

Stocks fall 2.2% on tightening measures

By Li Zengxin (chinadaily.com.cn)
Updated: 2007-09-07 16:57

The Chinese stock market tumbled today in response to a set of tightening
measures by the central bank to reduce money supply and curb excessive
liquidity. The Shanghai Composite Index dropped 116.48 points or 2.16
percent, the largest single-day fall since August 1 in absolute terms.

Turnover of the stocks in the major indices was 286.8 billion yuan,
higher than yesterday.

Shanghai Composite Index
Source: sina.com.cn

The Shanghai index opened slightly lower at 5,381.19, climbed up to
5,405.36, the highest for the day for the only trading period above
yesterday's close, but then fell to 100 points lower than the opening.
Once there it turned up and hit the second highest place before the noon
break. In the afternoon, the index?slid again to the lowest at 5,269.25
soon before the close. Finally, it finished the day at 5,277.18.

Of the A shares listed in Shanghai, as many as 609 closed down, 75 ended
flat?but 158 went up against the trend, including 16 of them rising at
the 10 percent growth cap. The Industrial and Commercial Bank of China,
with the largest trading volume, fell 2 percent and CITIC Securities,
with the largest transaction value, dropped over 4 percent.

Shenzhen Component Index
Source: sina.com.cn

The Shenzhen Component Index, tracking the smaller Shenzhen Stock
Exchange, opened lower at 17,986.88 and closed 399.66 points or 2.21
percent lower at 17,674.10. It went through the whole day below
yesterday's close, within a range between 17,649.09 and 18,052.37.

Of the A shares, 132 closed up, 71 remained unchanged and 436 fell. Large
traders TCL and China Vanke were both down.

Stocks in the culture and media, timber and machinery industries were
more resistant to depressing forces. On the other hand, financial shares
lost ground today as all of them except Huaxia Bank and Bank of Nanjing
slipped, dragging down the indices.

The central bank yesterday announced two tightening measures to rein in
excessive liquidity. China will raise the reserve requirement ratio by
0.5 percentage points for commercial banks as of September 25. It is the
seventh time this year the Chinese government has opted to raise the
reserve requirement ratio.

(For more biz stories, please visit Industry Updates)

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