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CHINA / National |
Strong buying at close limits stock lossBy Jin Jing (China Daily)
Updated: 2007-11-13 07:08 SHANGHAI: Strong buying by mutual funds Monday afternoon stemmed the morning slide, helping the lead indicator recover some lost ground before closing at 5187.73, down 2.4 percent. The benchmark Shanghai Composite Index opened in a black mood in response to the fall in US stocks on Friday. Additionally, the hike of banks' reserve ratio by 0.5 percentage point on Saturday and macro-economic data to be released today intensified investors' worries of further interest rises. The index plunged sharply in the morning session, and fell as much as 5.3 percent to 5032.58, before rebounding with institutional investors buying large-cap stocks at the close. The Shenzhen Component Index fell 0.55 percent to close at 17065.77. The total market value of mainland stocks shrank 3.21 trillion yuan, or 9.6 percent, in one week to 30.15 trillion yuan Monday, according to figures from TX Investment Consulting Co Ltd. "Many institutional investors sucked in large-cap stocks in the afternoon to prepare for the launch of stock index futures, the timetable for which is expected to be released this month," said Wu Feng, an analyst at TX Investment Consulting Co Ltd. Besides, a 15 billion yuan ($2.02 billion) mutual fund, managed by Guotai Fund, is expected to be launched on Friday, after a two-month suspension of new funds. "The fund is expected to inject new capital into the market," said Zhu Haibin, an analyst at Essence Securities. "The sharp correction recently has dampened investor sentiment, which is not expected to recover soon," said Gui Haoming, an analyst at Shenyin Wanguo Securities. Last week, 152,003 new A-share accounts were opened daily on average, down from 177,746 the week before. "Looking forward, it will be difficult for the A-share market to replicate the astonishing bullish performance seen in recent years," said Jing Ulrich, chairman of JPMorgan Securities China Equities. "And we expect valuations will gradually decline due to rising corporate earnings, increased supply of shares and increased investment options for mainland investors," she added. Other Asia stock markets fell Monday, driven by persisting anxiety about the fallout from the US sub-prime crisis. Hong Kong's Hang Seng Index tumbled 3.88 percent to close at 27665.733; and Japan's Nikkei Index sank 2.48 percent to close at 15197.09. |
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