Chinese share prices continued to fall on Tuesday after the
release of strong inflation data for October.
China's consumer price index (CPI), the main gauge of inflation,
rose 6.5 percent last month compared with the same period in 2006,
the National Bureau of Statistics said on Tuesday.
The figure was up from the 6.2 percent recorded in September and
the same as the previous 11 year monthly record set in August.
The benchmark Shanghai Composite Index, which covers both A and
B shares, fell 29.61 points, or 0.57 percent, to close at 5,158.12
in volatile trading.
The key index, which rebounded 1.88 percent to finish the
morning session at 5,285.45, traded between 5,311.70 and
5,085.44.
The Shenzhen Component Index on the nation's smaller Shenzhen
Stock Exchange dropped 317.88 points, or 1.86 percent, to
16,747.89.
The Hushen 300 index, accounting for 60 percent of the nation's
total stock market value, slipped 39.01 points, or 0.78 percent, to
4,939.24.
The morning session's recovery came on bargain hunting and after
a fund had been approved to open for additional subscriptions later
this week. It is seen as a new signal from the government to back
up the stock market.
On November 4, the China Securities Regulatory Commission issued
a notice ordering fund firms not to expand the promised scale of
their funds within six months.
Analysts said shares started to fall in afternoon trading as
investor confidence failed to pick up amid fears for further
economic tightening measures, including interest rate hikes.
It was unrealistic to expect a huge rebound in the near future
as the market was in the initial period of correction, said Wan
Bing, a Guangfa Securities analyst.
The Shanghai Composite Index plunged 2.4 percent on Monday after
China's central bank raised the reserve requirement by 50 basis
points to a 10 year high of 13.5 percent.
Last week, the key index fell 8 percent to 5,315.54, the biggest
weekly loss during the past nine years.
Banking shares led the market drop as all lenders except for the
Bank of Nanjing and Bank of Ningbo fell.
Heavyweights Industrial and Commercial Bank of China shed 2.08
percent to 8 yuan and Bank of China dropped 1.70 percent to 6.94
yuan. China Minsheng Banking Corp. plunged 7.10 percent to 16.36
yuan.
Gains in the energy giants abated the market fall.
China Petroleum and Chemical Corporation, better known as
Sinopec, gained 3.74 percent to 23.01 and PetroChina, the nation's
largest oil and gas producer, added 1.59 percent to 37.03 yuan.
The A share index on the Shanghai Stock Exchange fell 31.06
points, or 0.57 percent, to 5,415.13 and the B share index fell
2.21 points, or 0.67 percent, to 330.03 percent.
(Xinhua News Agency November 14, 2007)
