Chinese shares lower in Friday morning trade

Chinese shares lower in Friday morning trade
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First Published: Fri, Aug 10 2007. 11 48 AM IST
Updated: Fri, Aug 10 2007. 11 48 AM IST
Shanghai: Chinese share prices fell 1.61% on Friday, 10 August morning as investors locked in profits amid jitters over heavy losses on global markets and ahead of the release of key domestic inflation data, dealers said.
The decline was led by heavy profit-taking in property and financial stocks, which had driven five consecutive record-breaking days and a gain of more than 10% over the past six trading sessions.
Wall Street lost nearly 3% overnight amid growing fears that problems in the US subprime mortgage market could trigger a worldwide credit crunch and undercut economic growth, perhaps even sparking a recession.
“Sharp falls in neighbouring markets provided a cue for profit-taking, particularly for dual-listed companies in domestic and overseas markets,” said Shen Jun, an analyst at Shangzhenglian Consulting.
Other Asian markets slumped in the morning after Wall Street’s tumble overnight.
Cao Yan, analyst at Dongwu Securities, said domestic factors were also at play on Friday.
China is scheduled to release eagerly anticipated July inflation data on Monday, with investors wary that a continued sharp rise in prices could prompt the central bank to hike interest rates again.
“Large caps took a breather after gaining for six days and ahead of the macroeconomic data due on Monday. As a result, the market is seeing more volatility,” Cao said.
However, analysts said policy tightening following the July inflation data may have a limited impact on stock prices, since liquidity remains ample.
Last week more than one million trading accounts for mutual funds were opened, the highest level since 2005, according to statistics released by China’s official securities clearing house.
The benchmark Shanghai Composite Index, which covers both A- and B-shares listed on the Shanghai Stock Exchange, ended the session down 76.61 points or 1.61% at 4,677.49, off a fresh intra-day high of 4,769.62.
The Shanghai A-share Index lost 79.92 points or 1.60% to 4,909.27 and the Shenzhen A-share Index shed 46.10 points or 3.27% to 1,365.13.
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First Published: Fri, Aug 10 2007. 11 48 AM IST