A sharp fall in the US market further weakened investor
sentiment yesterday, dragging down the benchmark index nearly 2
percent to its lowest level in three months.
Turnover on the mainland's two bourses shrank 10 percent
yesterday to 78.57 billion yuan from the day before, as many
investors sold stocks in anticipation of a downward trend, analysts
said.
The Shanghai Composite Index dropped 1.97 percent, or 97.74
points, to close at 4861.11. Losers outnumbered gainers 533 to 293.
The Shenzhen Component Index fell 2.34 percent to close at
15861.01, while the Hang Seng Index slipped 1.51 percent.
"The continuing slide of PetroChina and other large-caps shows
major market players are unwilling to enter the market," said Qin
Hong, an analyst at the Bohai Investment Research Institute.
PetroChina continued to fall, shedding 3.58 percent to close at
32.55 yuan yesterday. It has lost 26 percent in the past three
weeks.
Ping An of China plunged 4.68 percent to close at 100.98 yuan,
and China Life slipped 4.12 percent to close at 53.51 yuan. China
Merchants Bank tumbled 1.85 percent to close at 37.57 yuan.
The gloomy mood was reflected in poor sales of mutual funds, the
darlings of investors only a few months ago. "Some newly issued
mutual funds have failed to meet their original targets because of
a poor response from potential subscribers," said Zhang Fan, an
analyst at Changjiang Securities. Many older funds were forced to
sell shares to meet rising demand for redemption by investors, he
said.
Zhang added that the return on a mutual fund with assets of
about 10 billion yuan amounted to an average of 100 million a
day.
According to a consulting firm's recent survey of 27 fund
managers, around 50 percent of respondents said they had reduced
their stock holdings in November.
Most of them said they expected the market to fluctuate in the
short term, but were positive on stocks in the real estate and
financial sectors.
"PetroChina has become something of a signal for the market; its
movement will trigger other stocks to follow its direction," said
Zhang.
"The market is not expected to rebound until there are strong
purchases of large-caps and an obvious strong performance in
certain sectors," said Qin.
(China Daily November 28, 2007)
