Stocks see the largest weekly fall since '96

By Jin Jing (China Daily)
Updated: 2008-06-14 08:42

SHANGHAI: The mainland stock market plunged 13.8 percent over the past week, the largest one-week fall since December 1996, wiping out 3.07 trillion yuan ($445 billion) of market capitalization.

A man stands in front of an electronic board at a brokerage house in Shanghai June 12, 2008. [Agencies]

The benchmark Shanghai Composite Index slid 3 percent to close at 2868.8 on Friday, with 794 of 912 stocks closing lower. The Shenzhen Component Index fell 3.9 percent, down 403.42 points, to close at 9936.73, breaking the 10,000 psychological barrier.

The Shenzhen Index slumped 15.3 percent over the past week.

Turnover on the two bourses totaled 67.3 billion yuan on Friday, slightly down from Thursday.

The mainland stock market has tumbled more than 45 percent since the beginning of the year.

Many large-caps, including China Pacific Insurance, Bank of Communications, PetroChina and China Shipping Container Lines Co Ltd, have fallen under their IPO prices.

China Construction Bank fell 2.66 percent to close at 6.23 yuan yesterday, against its issue price of 6.45 yuan. Citic Bank slid 4.75 percent to 5.42 yuan, against its issue price of 5.8 yuan.

Analysts said investors are still worried about possible further tightening measures by the government and the gloomy outlook hanging over the China and world equity market.

Wu Feng, an analyst at TX Investment Consulting Co Ltd, said: "The weak investor sentiment is unlikely to recover in the short term."

Individual investors are advised to stay away from the market until the picture becomes clearer, he said.

"It is hard to say where the bottom is, and the market may continue to dive."

The government is expected to maintain the tightening monetary measures to combat inflation, analysts have said.

Jing Ulrich, chairman of JPMorgan Securities China Equities, said: "Although food inflation is moderating, growing liquidity in the financial system points to continuing inflationary pressure."

Zhang Xiuqi, an analyst at Guotai Jun'an Securities in Shanghai, said: "So far, it's hard to see any bottom to this market. I don't see any signs of a rebound."

Agencies contributed to the story

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