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Property curbs to keep stock gains in check

By Yu Xi (Global Times)

08:42, July 23, 2012

Chinese markets ended with losses Friday as anxieties about the global economy weighed on investor confidence.

The Shanghai Composite Index finished trading at 2,168.64 points Friday, down 16.20 points, or 0.74 percent. Meanwhile, the Shenzhen Component Index wrapped up last week at 9,333.21 points after declining 176.27 points, or 1.85 percent, on the day.

Both markets kicked off last week with heavy losses, as a slew of profit warnings crushed stock prices for many large firms Monday, deepening concerns about the domestic economy.

Premier Wen Jiabao said during a meeting in Sichuan Province last weekend that the economic challenges facing the country would persist for a while longer although the government will continue its efforts in the second half to stabilize economic growth. These statements helped revive sentiment Tuesday, as both mainland markets turned around from the previous day's slide.

Real estate sector stocks fell sharply Wednesday after the National Bureau of Statistics released a report showing that newly-built homes in 25 out of 70 major cities saw their prices rise month-on-month in June. Despite a drop in the heavily weighted sector, the Shanghai Composite eked out a slight win for the day.

Shares of companies based in Shanghai got a further lift Thursday after the State-owned Assets Supervision and Administration Commission of the Shanghai municipal government announced that it would push forward reorganization and securitization plans for local State-owned enterprises (SOEs) during the third quarter.

A gloomy outlook on the global economy for the coming three to six months from many prominent investment companies was largely the cause of Friday's losses, according to analysts.

The slight market rebound which began Tuesday is over thanks to recent statements from the government stressing that curbs on the property market will not be loosened, according to a report by the China Business News Sunday, citing Gui Haoming, a chief analyst at Shenyin & Wanguo Securities.

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