Market hurt by rate rise rumors

08:44, December 21, 2010      

Email | Print | Subscribe | Comments | Forum 

China's stocks fell, driving the benchmark index down by the most in three weeks, on concerns the government may raise interest rates to tame inflation.

Jiangxi Copper Co and Aluminum Corp of China Ltd slid on Monday. Citic Securities Co, the nation's biggest brokerage, dropped to the lowest in a month on concern a slumping stock market will hurt earnings.

The Shanghai Composite Index slid 1.41 percent to 2852.92 at the 3 pm close, the most since Nov 30. The CSI 300 Index fell 1.46 percent to 3178.66.

Jiangxi Copper declined 0.82 percent to 40.11 yuan ($6.01), meanwhile Aluminum Corp of China retreated 1.83 percent to 10.19 yuan.

The Shanghai Composite, the worst performer among major Asian benchmarks this year, has fallen 9.7 percent since reaching an almost seven-month high on Nov 8, on concern that monetary tightening will curb economic growth. The gauge has lost 14 percent this year.

"People are still worried about further policy tightening such as interest-rate increases," said Larry Wan, Beijing-based head of investment at Union Life Asset Management Co, which oversees the equivalent of $2.21 billion. "The government hasn't increased rates yet as had been speculated by the market. It's like a sword hanging over the market."

China Construction Bank Corp paced declines for lenders, falling 1.06 percent to 4.66 yuan on Monday. Kweichow Moutai Co plunged 3.44 percent to 197.38 yuan.

China's inflation may exceed 5 percent to 6 percent in some months of next year, the People's Daily reported on Monday.

China increased interest rates in October for the first time since 2007 as inflation reached 4.4 percent on an annual basis, the highest since September 2008. Since then, the central bank has raised reserve requirements for lenders three times in five weeks. The last increase was on Dec 10.

Dongfang Electric Corp, China's third-largest power equipment maker, advanced 2.48 percent to 35.10 yuan, the highest since Nov 11. The company said it received 20.4 billion yuan of orders for thermal, wind and nuclear power generating equipment from India and China.

Fangda Carbon New Material Co climbed 5.02 percent to 13.59 yuan, a record since its listing in 2002.

Shanghai Maling Aquarius Co, a manufacturer of canned food, jumped the 10 percent daily limit to 14.32 yuan after saying it plans to buy 1.55 billion yuan of assets from its parent. Shanghai Maling will issue as many as 134.2 million shares at no lower than 11.55 yuan each to pay for the assets.

Tianjin Port Co slid 2.88 percent to 8.44 yuan after saying 579.5 million of its locked-up shares would become tradable on Dec 27.

Source:China Daily
  • Do you have anything to say?

双语词典
dictionary

  
Special Coverage
  • Focus On China
  • Shanghai World Expo 2010
Major headlines
Editor's Pick
  • UN Security Council extends peacekeeping force mandate in Cote d'Ivoire
  • Two dead as rainstorm soaks Los Angeles
  • Olympic torch removed at Bird's Nest
  • David Beckham wins BBC lifetime achievement award
  • Australia swaps summer for white Christmas
  • Traditional Han costumes worn for Winter Solstice in Chongqing
Most Popular
Hot Forum Dicussion