Overshooting worries

With PetroChina sinking below its initial offer price, the stock market risks overreacting to the country's economic slowdown. Policymakers should take measures to prevent investors' confidence from collapsing.

Last Friday, shares in the nation's biggest oil company dropped 5 percent to 16.02 yuan, below the initial offer price of 16.70 yuan, for the first time since they began trading in the domestic stock market on November 5, 2007. The stock has plunged by almost two thirds since it peaked at its debut on the Shanghai stock exchange.

This surely dealt a heavy blow to Chinese stock investors who helplessly watched the benchmark index being dragged below the psychological level of 3,100, the lowest in 13 months.