Chinese shares fall 5.23 pct after weeklong holiday

(Xinhua)
Updated: 2008-10-06 17:26

BEIJING -- Chinese shares tumbled 5.23 percent on Monday, the first trading day after the weeklong National Day holiday, dragged down by the losses of the heavyweight banking sector.

The Shanghai Composite Index dropped 120.05 points, or 5.23 percent, to close at 2,173.74 points. The Shenzhen Component Index fell 341.95 points, or 4.52 percent, to 7,217.32 points.

Aggregate turnover was 68.04 billion yuan (about 10 billion US dollars). Losses outnumbered gains 1,406 to 192, while 110 stocks were unchanged.

The mainland stock market last week escaped the impact of a global plunge due to its closure for the seven-day National Day holiday on September 29 through October 5.

When the stock market was reopened Monday, bank shares led the fall as Chinese investors were still concerned over the US financial crisis despite the approval of the massive US financial rescue plan last week.

Bank shares fell 8.54 percent on average. Shares of five banks, including China Merchants Bank, Pudong Development Bank and the Industrial Bank, plunged by the 10 percent daily limit.

The Industrial and Commercial Bank of China, the country's largest lender, shed 6.44 percent to 4.07 yuan. China Merchants Bank closed at 15.86 yuan per share.

Coal producer shares also plunged as investors were worried coal prices could decline amid the falling oil price on the international market.

Shares of the coal-producing sector as a whole dropped almost by the 10 percent daily limit. More than two-thirds of coal producer shares, including the country's top producers China Shenhua and Yanzhou Coal Mining Company, plunged by the 10 percent limit.

Brokerage companies saw gains after news on Sunday that China Securities Regulatory Commission would soon launch the margin trading business for securities firms.

Haitong Securities rose by the 10 percent daily limit to 23.67 yuan per share, Guojin Securities gained 7.7 percent to 34.83 yuan, while Guoyuan Securities was up 5.9 percent to 20.65 yuan per share.

Margin trading, which allows traders to borrow part of the money necessary to buy a security, would change the current one-way trading on both the Shanghai and Shenzhen bourses and serve as a risk aversion tool for investors.