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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 along the biggest losers. 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 worriesProfit 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.