China shares tank 5.16%, see biggest fall in 14 months

[GoFlyKiteNow]

12 Nov, 2010, 02.19PM ,AGENCIES
China shares tank 5.16%, see biggest fall in 14 months

SHANGHAI: Chinese stocks closed down 5.16 percent on Friday, as investors scrambled to bank profits before the government introduces any new monetary tightening measures, dealers said.

The Shanghai Composite Index , which covers both A and B shares, was down 162.31 points at 2,985.44 on turnover of 298.4 billion yuan (44.9 billion dollars).

It was the biggest single-day fall since the index closed down 6.74 percent on August 31, 2009.

"Investors are aggressively trimming their positions as they are afraid the government may announce further tightening measures over the weekend," Huatai Securities analyst Zhou Lin told Dow Jones Newswires.

China said Thursday that consumer prices rose at their fastest pace in more than two years in October, raising expectations of another rate hike as Beijing admits it may miss its 2010 inflation target.

Banks and property developers led the decline amid fears over further tightening moves, traders said.

Industrial and Commercial Bank of China ended down 1.9 percent to 4.68 yuan. China Merchants Bank shed 5.2 percent to 13.99.

China Vanke plunged 7.1 percent to 8.53 yuan. China Merchants Property Development fell 7.7 percent to 16.74.

Metal stocks were also weak due to falling global commodities prices.

 

[Dreamer1]

Leapfrog communist China greatly admired by MM LKY now must really shows its true color.

Uncle Sam is planning 2010 Seoul accord,and it will win with QE2.

In the mean time,very brillaint Madam Ho rushed in to accumulate more PRC shares like CCB.etc

Using not her own money of course due to her excellent track record in share investment(applicable to PRC only)

Sinkies,yr money is at risk,yet again

Also erection is just around,Madam HO can pump in 100 times more after the erection victory.

 

[longbow]

I think this is excellent time to enter Chinese market. Weakness in property section is reflection of Beijing actions. Precisely what they want - moderate property price gains as well as control inflation.

At recent G20, US was flailing around and instead of the devalued Yuan story, the rest of the G20 nations are going after the US. The big kahuna in Asia is not US or Japan but CHINA.

What many fail to realize is that lowered US$ does not impact China as much as Germany and Japan. After all, US mfgs do not and cannot compete with the Chinese on price. However, a weak US$ will help US mfg against german/japan products. Boeing vs Airbus, Pratt Whitney vs RR, Caterpillar vs Komatsu Volvo ......

These are industries that US compete against. So response from QE2 has been strongest from US allies like Germany and Japan not China.

China's unhappiness has more to do with US trying to tell it what to do.

And China's consumption growth is much higher than Germany given it economic growth. After all GM sells more cars in China then it does in US.

BTW 3 years ago there was lots of talk about made in China Mattel toys. # years later it is still the same - all made in China. Futhermore, many of the toys today have sophisticated microprocessors in them and the Chinese have the supply chain from their electronic industry to help (talking dolls, mice that can avoid objects)