Shanghai index down 4% as property, banks tumble

09:40, May 07, 2010      

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China's key stock index ended down 4.1 percent Thursday at an eight-month closing low, on concerns that the government may take new steps to curb speculation in the housing market.

The Shanghai Composite Index fell to 2,739.7 points, its lowest since September 2 and its second-biggest percentage fall this year, erasing a modest technical bounce Wednesday.

Analysts said rumors of new tightening policies, including a general property tax, was the main drag on the index.

"There is concern that once and if the measures appear, it will worsen sentiment for the property and financial sectors," said Wu Nan, an analyst at Xiangcai Securities.

Wu said that the rebound Wednesday had not been strong enough to sustain upward mo-mentum on the index.

"Property stocks still have room to fall," Wu added.

Concerns that Greece's debt woes would trigger a broader crisis and an announcement from Hua Xia Bank that it would issue a private share placement also weighed on the market.

"The falls in overseas markets, particularly the US, are affecting trading today," Wu said.

Shanghai's property sub-index slumped 5.2 percent.

Shares in Hua Xia Bank fell their 10 percent limit after it announced plans to raise up to 20.8 billion yuan ($3.05 billion) via a private share placement.

Source: Global Times
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