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Benchmark stock index tumbles

By Jin Jing and Hui Ching-hoo (China Daily)
Updated: 2007-02-01 10:16

"More and more institutional investors think that the prices of many big-cap stocks have gone too high," said Zhang Yidong, an analyst at Industrial Securities. "They were the big sellers in the market."

But Zhang predicted that the correction would be short-term because of strong fundamentals such as strong economic growth and healthy corporate earnings potential.

"It is nothing more than a short-term adjustment in a strong rally," he said.

Chen Wenzhao, with Changjiang Securities, said a short-term correction should lead to a healthier market. He predicted that the market would soon pick up backed by strong corporate performance.

The tremor of the mainland market also spread toHong Kongwhere many mainland companies are listed. The benchmark Hang Seng Index yesterday plunged 354 points or 1.73 per cent, closing at 20,106 points.

(China Daily 02/01/2007 page1)