Record-high CPI triggers 4.5% plunge of China stocks
Updated: 2007-09-11 16:47
The announcement of the highest consumer price index (CPI) figure in 11 years and the issuance of another batch of special treasury bonds totaling 200 billion yuan finally triggered a wave of panic selling today resulting in the largest single-day drop in three months.
Other factors for the slump also included a series of previous "discouraging" factors that had failed to affect the market heavily through yesterday.
The Shanghai Composite Index, after hitting a temporary high in the morning, plummeted 241.32 points or 4.51 percent by close, the deepest plunge in the post-May 30 period after June 4 when the benchmark index fell 330 points in a single day.
Total turnover of the stocks in the major indices was 259.2 billion yuan, higher than yesterday's figure.
Shanghai Composite Index
Source: sina.com.cn
The benchmark Shanghai index opened higher at 5,362.94 and seemed resistant to the CPI release at first, by hitting the highest 5,395.04 and fluctuating in short ranges without forming a clear trend in the morning. In the afternoon, however, it began sliding and lost another 130 points in less than 30 minutes just before the close to hit the lowest at 5,093.92. A slight rebound near close could not save the market from a losing day.
Of the A shares listed in Shanghai, only 48 went up, 62 ended flat but as many as 732 closed down. The Industrial and Commercial Bank of China, with largest trading volume, fell 5.6 percent to further drag down the index. China COSCO Holdings, with the largest transaction value, rose an astounding 10 percent to 38.46 yuan, leading today's few gainers.
Shenzhen Component Index
Source: sina.com.cn
The Shenzhen Component Index, tracking the smaller Shenzhen Stock Exchange, opened higher at 17,926.60 but closed 789.09 points or 4.4 percent down to 17129.39. Mapping out a similar trend to its Shanghai counterpart, the index went through the day within a range of between 17,088.67 and 18,064.15.
Of the A shares, 37 climbed up, 536 fell and 66 remained unchanged. Large traders TCL and China Vanke were both down about 5 percent.
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