Index plunges 280 points on CPI announcement
Updated: 2007-10-25 16:34
The National Bureau of Statistics announced Thursday morning that China's CPI, a key inflation indicator, rose by 4.1 percent in the first nine months over the same period last year. Although it eased after surging to an 11-year monthly high of 6.5 percent in August, the September CPI still reached 6.2 percent.
Investors worried that the figures may trigger another hike in interest rates, or even stricter tightening measures from the financial authorities to curb inflation and asset bubbles.
Meanwhile, there are reports that from next year, residents should report their stock investment gains to local tax institutions if it is over 120,000 yuan. This possible change, according to some investors, may be the prelude of tax imposition upon stock earnings.
In a related move, PetroChina, the nation's largest oil producer, today announced the price range of its A-share Initial Public Offering (IPO) is set at 15 to 16.7 yuan per share.
Backed by domestic investors, the oil giant will probably break the IPO record on the Chinese mainland. To participate in its potentially lucrative online subscription on October 26, investors have to sell their stocks a day earlier for cash, which also contributed to today's plunge.
However, market watchers say it is unwise for investors to be completely pessimistic about China's equity market simply due to the recent correction, as the rosy prospect of the economy, as well as corporate earnings has not changed.
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