Friday - November 09, 2007

Chinese Stock Market Plunges 

Just my two cents on the losses seen in the Chinese stock market in the last week. Could it be all the dollars that the Chinese hold (and threatened to use against the U.S. earlier this summer) right now are worth less, the price of oil is hurting their economic expansion, and that the price of their exports has risen, are all working together to slow the Chinese economy?

China's main stock index closed Friday with a weekly loss of 8 percent, its biggest weekly drop since May 1997, as investors retreated from the market because of worries about government policy and heavy supply of new shares.

The Shanghai Composite Index ended down 0.27 percent at 5,315.540 points, its lowest finish since September 14, after moving between positive and negative territory. On Thursday it plunged 4.85 percent, its largest daily drop in four months.

Losing Shanghai stocks outnumbered gainers on Friday by 499 to 336. Turnover in Shanghai A shares was a very small 79.9 billion yuan ($10.8 billion), near a 15-week low.

A bull run in Chinese stocks pushed the index up 129 percent between the start of this year and a record intra-day high of 6,124 points in mid-October.

But since then investors have been discouraged by tightening monetary policy, authorities' curbs on fund flows into stocks, a flood of new share offers, high valuations and sagging foreign stock markets. Read more....

Author: The Machiavellian
Technorati Tags: China Stock Market
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