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Growth concerns dent China shares | Growth concerns dent China shares |
(40 minutes later) | |
China's main share index fell by 5.3% on Monday to a 20-month closing low on fears that slowing economic growth is set to hit corporate profits. | China's main share index fell by 5.3% on Monday to a 20-month closing low on fears that slowing economic growth is set to hit corporate profits. |
The Shanghai Composite Index ended at 2,319.9 points. It has lost 15% over the past seven trading days and fallen 62% from last October's record peak. | The Shanghai Composite Index ended at 2,319.9 points. It has lost 15% over the past seven trading days and fallen 62% from last October's record peak. |
More than 200 firms saw their shares fall by 10%, the maximum daily limit, with airlines among the biggest losers. | |
Coal producers also fell on plans for higher export taxes on their goods. | Coal producers also fell on plans for higher export taxes on their goods. |
Some analysts said that the market was likely to fall further. | Some analysts said that the market was likely to fall further. |
"There is no confidence at all, and no money entering the market to clean up this mess, so no one can call a floor now," said Zhang Qi, an analyst at Haitong Securities. | "There is no confidence at all, and no money entering the market to clean up this mess, so no one can call a floor now," said Zhang Qi, an analyst at Haitong Securities. |
The losses in China hit Hong Kong shares - the Hang Seng Index dropping 1.1% to close at 20,930.67, its worst finish in more than a year. | The losses in China hit Hong Kong shares - the Hang Seng Index dropping 1.1% to close at 20,930.67, its worst finish in more than a year. |
Profit worries | Profit worries |
China's biggest train maker, South Locomotive, saw its shares jump by 58% from its flotation price at the end of its first day of trading. | China's biggest train maker, South Locomotive, saw its shares jump by 58% from its flotation price at the end of its first day of trading. |
The gains were in line with analysts' expectation, but observers said that the advances - in the context of heavy losses elsewhere - reflected that South Locomotive shares had been cheap. | The gains were in line with analysts' expectation, but observers said that the advances - in the context of heavy losses elsewhere - reflected that South Locomotive shares had been cheap. |
Investors saw newly-listed shares as safe short-term bets, they added. | Investors saw newly-listed shares as safe short-term bets, they added. |
"Money poured into South Locomotive as its price looked relatively attractive in such a weak market - but much of the buying looks speculative and risky," said CITIC-Kington Securities analyst Qian Xiangjing. | "Money poured into South Locomotive as its price looked relatively attractive in such a weak market - but much of the buying looks speculative and risky," said CITIC-Kington Securities analyst Qian Xiangjing. |
There are concerns that a slowdown in the Chinese economy could lead to corporate profit growth hitting a virtual standstill in 2009, having risen by 20% in the first half of 2008. | There are concerns that a slowdown in the Chinese economy could lead to corporate profit growth hitting a virtual standstill in 2009, having risen by 20% in the first half of 2008. |
Such fears have been reinforced by Lehman Brothers recently forecasting that China's real gross domestic product (GDP) growth would fall to 8% percent in 2009 from 9.5% in 2008 and 11.9% percent in 2007. | Such fears have been reinforced by Lehman Brothers recently forecasting that China's real gross domestic product (GDP) growth would fall to 8% percent in 2009 from 9.5% in 2008 and 11.9% percent in 2007. |
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