SHANGHAI: China's main stock index slid more than 4 per cent on Monday, led by property shares, in response to weak foreign stock markets and concern about inflation and growth trends in the Chinese economy. The benchmark Shanghai Composite Index ended the morning down 4.44 per cent at 3,337.828 points, less than one point off its intra-day low.
Losing Shanghai stocks far outnumbered gainers by 849 to 51. Turnover in Shanghai A shares remained tiny at 34.9 billion yuan ($5.0 billion) against Friday morning's 33.6 billion yuan. Analysts said weekend comments by officials and economists at the Boao Forum for Asia in southern China indicated the country still faced a serious threat from inflation and a possible economic slowdown because of the US credit crisis.
For example, a front-page summary of the conference by the official China Securities Journal said global grain supplies were expected to stay tight until about 2010, while Chinese real estate prices would "moderate". "The comments from the Boao Forum are being interpreted as negative for areas including the property market," said Zhang Qi, analyst at Haitong Securities. "Concern over a possible weakening performance of China's macroeconomy are keeping many investors on the sidelines today," said Zheng Weigang, senior stock analyst at Shanghai Securities.
Poly Real Estate Group plunged its 10 percent daily limit to 24.30 yuan and the biggest listed property developer, Vanke, lost 9.38 percent to 23.08 yuan. Stock market liquidity will remain under pressure at least through Wednesday, when Zijin Mining takes retail subscriptions to its IPO, traders said. Also, March inflation data is due late this week and analysts think a modest interest rate hike in response is possible.
Losing Shanghai stocks far outnumbered gainers by 849 to 51. Turnover in Shanghai A shares remained tiny at 34.9 billion yuan ($5.0 billion) against Friday morning's 33.6 billion yuan. Analysts said weekend comments by officials and economists at the Boao Forum for Asia in southern China indicated the country still faced a serious threat from inflation and a possible economic slowdown because of the US credit crisis.
For example, a front-page summary of the conference by the official China Securities Journal said global grain supplies were expected to stay tight until about 2010, while Chinese real estate prices would "moderate". "The comments from the Boao Forum are being interpreted as negative for areas including the property market," said Zhang Qi, analyst at Haitong Securities. "Concern over a possible weakening performance of China's macroeconomy are keeping many investors on the sidelines today," said Zheng Weigang, senior stock analyst at Shanghai Securities.
Poly Real Estate Group plunged its 10 percent daily limit to 24.30 yuan and the biggest listed property developer, Vanke, lost 9.38 percent to 23.08 yuan. Stock market liquidity will remain under pressure at least through Wednesday, when Zijin Mining takes retail subscriptions to its IPO, traders said. Also, March inflation data is due late this week and analysts think a modest interest rate hike in response is possible.
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