Selling frenzy drove Chinese shares further down Tuesday after a
major slump in the previous trading day, with blue chips leading
the way.
The benchmark Shanghai Composite Index closed the morning
session at 3,462.52 points, down 207.88 points, or 5.66 percent
lower.
The decline rate was more than half of the 8.26 percent level
recorded for the whole Monday.
The index, which tracks both yuan-denominated A-shares and
foreign currency-denominated B-shares listed on the Shanghai Stock
Exchange, closed at 3,670.4 points on Monday, down 8.26 percent
from last Friday.
The index had a cumulative fall of over 15 percent since the
bourse struck a high point of 4,335.18 points on May 29.
Some analysts said Tuesday's plummeting was owed largely to
panic-stricken sellers, who saw most of stocks falling to the daily
limit of 10 percent for four consecutive days.
The continuous bearishness followed the government policy of
tripling stamp tax on stock trading from 0.1 percent to 0.3 percent
last week. It was believed to targeting at the speculative bubble
on China's equity markets.
However, some market observers held, despite the big-margin
corrections, the markets, particularly A-share markets, would come
back to a bullish run in a longer term, as major factors behind
market performance, including yuan's appreciation and impressive
operation of A-share companies, would remain largely unchanged for
the rest of the year.
The Component Index on the Shenzhen Stock Exchange ended
Tuesday's morning session at 10,886.51 points, down 581.95 points,
or 5.07 percent, from Monday closing at 11,468.46 points.
Heavyweights contributed to the slump.
Bank of China went down 3.33 percent to 4.93 yuan, Industrial
and Commercial Bank of China, down 3.21 percent to 4.83 yuan, and
China Life, the top life insurer in the country, down 2.83 percent
to 33 yuan. Sinopec, China's biggest oil refiner, drove the overall
index down by some 24 points.
(Xinhua News Agency June 5, 2007)
