Chinese share prices fall drastically

Updated: 2007-08-16 17:08

Chinese share prices plummeted on Thursday, as market sentiment was dampened by continuous slumps on neighboring markets.

The benchmark Shanghai Composite Index went down 104.44 points or 2.14 percent to conclude the daily trading at 4,765.44 points on a transaction volume of 129.9 billion yuan (US$17.1 billion). The key market performance indicator moved between 4,710.31 and 4,845.02 points.

The Shenzhen Component Index on the smaller stock market dropped 269.37 points or 1.65 percent to end the day at 16,053.1 points on a business turnover of 75.1 billion yuan (US$9.9 billion).

The two bourses recorded approximately 800 gains and 700 losses, with combined turnover at 205.6 billion yuan (US$27.16 billion), slightly higher than the previous day.

Analysts said the drop on the neighboring stock markets, which was a result of home mortgage woes in the United States, accounted for the fall on Thursday. The Japanese stock index witnessed a fall of 1.99 percent and Heng Seng Index in Hong Kong down 3.67 percent. The Republic of Korea and the Indonesia saw an index fall of 6.93 percent and 7.77 percent respectively.

Heavy slump of weighted stocks pulled the Chinese stock indices down. Banks and petrochemical companies, driving the market up in previous days, became the strong bearish force.

The Industrial and Commercial Bank of China (ICBC), China's largest state-owned commercial bank, slumped 4.51 percent to 6.77 yuan per share. The Bank of China fell 3.88 percent to 5.59 yuan per share.

Sinopec, China's largest oil refiner, fell 3.43 percent to stand at 14.90 yuan per share. China Life was down 4.47 percent to close at 48.77 yuan per share.

Analysts said the above four blue-chip stocks pulled the stock index down by about 50 points.

Communication, construction, pharmaceutical, petrochemical, eletronics, retail and textile sectors maintained an upward movement in recent days, while financial, real estate, mining, paper-making, public utility, hydro power and nonferrous metal sectors suffered losses.

Amid panicky sale of blue-chips, some investors chose to continue holding junk shares, according to market observers.

The observers said institutional investors' pessimism had been aggravated more or less.

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