Market slides to six-month low
Updated: 2008-02-02 09:12
The stock market shed another 1.43 percent on Friday to slide a total 9.3 percent this week to its lowest level in six months, wiping out another 2.6 trillion yuan ($361.1 billion) in combined market capitalization.
The benchmark Shanghai Composite Index lost 62.62 points to close at 4317.91, with 771 of 902 stocks closing lower.
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The estimated impact of the worst snowstorms to hit central and southwestern China has further depressed investor sentiment, analysts said.
Stocks in transport, electricity and gas supply dragged down the index as worries of energy shortages and transport trouble from the bad weather worsened.
Shanghai-based SAIC Motor Corp Ltd dived 5.73 percent to close at 19.43 yuan. Qianjiang Water Resources Development Co Ltd plunged 9.42 percent to 13.07 yuan, and Shanghai Electric fell 3.59 percent to close at 8.33 yuan.
"The unexpected snowstorms have interrupted the normal flow of China's economy, particularly the northwest-bound migrant workers and southeast-bound coal supply chain that often peaks before Chinese New Year," said Shen Minggao, an economist at Citigroup.
However, Yang Yushan, a researcher at Huafu Fund Management Co Ltd, said: "Investors need not worry too much about the temporary weather disaster - its impact on the economy is short term."
Oil giant PetroChina fell 3.36 percent to close at 24.42 yuan, while oil supplier Sinopec slipped 3.07 percent to close at 16.44 yuan.
Meanwhile, stocks in the financial sector performed well, as the expectation of currency appreciation continues. The Industrial and Commercial Bank of China rose 3.06 percent to close at 6.73 yuan, and Bank of Ningbo jumped 4.52 percent to close at 17.8 yuan.
Property stocks also recovered from the latest large drops. Vanke A, China's largest real estate developer, advanced 3.65 percent to close at 27 yuan. China Merchants Property Development Co Ltd surged 4.74 percent to 61.86 yuan.
"The average price-earnings ratio of real estate companies was around 20 times - lower than the market average of 26 times," said Wu Feng, an analyst at TX Investment Consulting Co Ltd.
"Many stocks have returned to a reasonable level after the sharp falls in the past few weeks, and some stocks have shown investment value," said Liu Zhaoyang, a fund manager at Industrial Fund Management Co Ltd.
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