Holiday blues for stock index | Shanghai Daily

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September 29, 2009

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Holiday blues for stock index

SHANGHAI'S key stock index fell more than 2 percent yesterday to a four-week low after many investors cashed in at least part of their portfolios to reduce their exposure to risk during the eight-day National Day holiday that begins on Thursday. It is the longest scheduled equities-trading break among major markets in the world.

Market confidence is still unsettled by fears too many new share offers are coming to the bourses. The benchmark Shanghai Composite Index dropped 2.65 percent to 2,763.539 points. Turnover shrank to 75.5 billion yuan (US$11.1 billion) from 81.1 billion yuan.

"The turnover kept shrinking, which indicated investors were increasingly cautious," said Zhang Fan, an analyst at Guangdong Foretech Investment Consultants Co.

Commodity producers led yesterday's declines as the prices of gold, oil and other resources fell. Zhongjin Gold Corp tumbled 5.8 percent to 51.41 yuan after the bullion fell below US$990 per ounce in the United States. Jiangxi Copper Co slumped 5.6 percent to 33.06 yuan.

"The lock-up period for a huge amount of non-tradable shares will expire next month, which strengthened concerns about a share glut," S&E Securities Brokerage said.

A record 2 trillion yuan worth of shares will float on the mainland's two bourses next month. Heavyweights such as the Industrial and Commercial Bank of China and Sinopec will unlock all their non-tradable shares in October. PetroChina lost 1.79 percent to 12.62 yuan. Sinopec retreated 1.58 percent to 11.21 yuan.

Media companies advanced after guidelines to rejuvenate the culture industry were approved by the State Council. Northern United Publishing & Media increased 2.27 percent to 9.48 yuan.




 

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