Mainland stocks fall from high at noon break_Market-News—China Economic Net
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Mainland stocks fall from high at noon break
Last Updated(Beijing Time):2007-05-11 13:07
Chinese mainland stocks slid from a record after the central bank said the economy still faces inflation risk and a possible rebound in investment, suggesting policy makers will step up efforts to curb lending. China Minsheng Banking Corp and property developer China Vanke Co fell.

The Shanghai Composite Index, which tracks the bigger of domestic stock exchanges, fell 1.4 percent, to 3,993.85. The Shenzhen Composite Index, which covers the smaller one, lost 1.3 percent, to 1,108.98.

``The central bank will use multiple monetary tools to drain liquidity and to stop the stock-market bubble growing,'' said Yan Ji, an investment manager at HSBC Jintrust Fund Management Co in Shanghai, which manages US$517 million.

The amount of money in China's financial system remains excessive, the People's Bank of China said in a quarterly monetary policy report posted on its Website late yesterday.

The central bank sold about 110 billion yuan (US$14 billion) of additional three-year bills to selected banks yesterday to help limit lending, the Shanghai Securities News said, without citing anyone. It last raised interest rates on March 18 and has ordered banks to set aside more money as reserves four times this year.

China Minsheng Banking, the nation's fastest-growing bank, lost 0.45 yuan, or 3.3 percent, to 13.12 yuan. China Merchants Bank, the seventh-largest lender, fell 0.39 yuan, or 1.8 percent, to 21.10 yuan. Industrial & Commercial Bank of China, the largest bank, slid 0.09 yuan, or 1.6 percent, to 5.68 yuan.

China Vanke, the biggest listed real estate developer, lost 0.46 yuan, or 2.1 percent, to 21.09 yuan.

``A stock-market bubble has been building rapidly,'' said Ma Jun, who manages the equivalent of US$100 million at E Fund Management Co in Guangzhou. ``The risk is getting higher that it will burst.''

Copper producers fell after the price of the metal tumbled the most in three months in New York.
Source:Shanghai Daily 
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