China stocks fall 1.2pc to its lowest close in seven months
Wednesday, 5 May 2010
SHANGHAI, May 4 (Reuters): China's key stock index fell 1.2 per cent Tuesday to its lowest close in seven months, led by bank and property shares after China's central bank raised banks' reserve requirement ratios to fend off inflation.
HSBC's China Purchasing Managers' Index for April, released Tuesday, dropped to a six-month low as output, new orders and employment all slowed, although it held above the boom-or-bust mark of 50 for a 13th month and the official PMI released on May 1 had risen.
The Shanghai Composite Index ended the day at 2,835.3 points, after closing flat Friday. The market was closed Monday for a national holiday.
Banks weighed on the index after the central bank's Sunday announcement of a 0.5 percentage point hike in the ratio of funds that banks must keep with the central bank as reserves, the third such increase this year under a campaign to absorb excess cash in the economy.
Minsheng Bank was the most actively traded share, down 1.7 per cent, while Industrial & Commercial Bank of China, the country's biggest lender and the third-most active share, fell 1.1 per cent.
"All sectors are under pressure from the reserve requirement ratio announcement, which is the major news for the market," said Zheng Weigang, analyst at Shanghai Securities.
HSBC's China Purchasing Managers' Index for April, released Tuesday, dropped to a six-month low as output, new orders and employment all slowed, although it held above the boom-or-bust mark of 50 for a 13th month and the official PMI released on May 1 had risen.
The Shanghai Composite Index ended the day at 2,835.3 points, after closing flat Friday. The market was closed Monday for a national holiday.
Banks weighed on the index after the central bank's Sunday announcement of a 0.5 percentage point hike in the ratio of funds that banks must keep with the central bank as reserves, the third such increase this year under a campaign to absorb excess cash in the economy.
Minsheng Bank was the most actively traded share, down 1.7 per cent, while Industrial & Commercial Bank of China, the country's biggest lender and the third-most active share, fell 1.1 per cent.
"All sectors are under pressure from the reserve requirement ratio announcement, which is the major news for the market," said Zheng Weigang, analyst at Shanghai Securities.