China shares fall on Wall Street losses
Chinese shares fell again on Friday after Wall Street tumbled on President Barack Obama's proposal to limit risk-taking at banks, ending the week down 3 percent.world Updated: Jan 22, 2010 14:05 IST
Chinese shares fell again on Friday after Wall Street tumbled on President Barack Obama's proposal to limit risk-taking at banks, ending the week down 3 percent.
The benchmark Shanghai Composite Index slipped 30.28 points, or 1 percent, to close at 3,128.59. The Shenzhen Composite Index for China's smaller second exchange shed 2.7 percent to 1,161.89.
The market lost ground following an overnight retreat in the US on Obama's proposal for sweeping reforms to the way banks in the US operate, a move that aims to prevent future financial crises. Investors have also started to see governments around the world pull back on stimulus policies, adding to jitters that the Chinese government has already tightened bank lending, analysts said.
China reported on Thursday rapid economic growth of 10.7 percent year-on-year in the last quarter of 2009, and that has triggered expectations the government might take more action to cool inflation and curb easy credit.
"Investors were concerned that Obama's regulation on banks will hurt the U.S. economy and then depress China's exports," said Zheng Gang, an analyst for Yingda Securities in the southern business city of Shenzhen.
Resource shares extended losses on sliding commodity prices. China Petroleum and Chemical Corp. declined by 1.1 percent to 12.2 yuan, while China Shenhua Energy Ltd., the country's biggest coal producer, lost 2.6 percent to 30.12 yuan.
Jiangxi Copper Ltd., China's biggest metal producers, dropped by 2.5 percent to 36.4 yuan, and Aluminum Corp. of China fell 1.8 percent to 13.48 yuan.
Real Estates shares lost again on liquidity concerns, with Poly Real Estate Group, China's No.2 developer, off 2.9 percent to 19.99 yuan, and rival China Vanke Ltd., down 2.6 percent to 9.55 yuan. But banks rebounded as investors were bought on attractive values after previous slumps.
China Construction Bank, Ltd. gained 2.2 percent to 6.02 yuan, while Industrial & Commercial Bank of China Ltd., China's biggest commercial lender, added 1.2 percent to 5.08 yuan. Bank of China Ltd. edged up 0.7 percent to 4.16 yuan.
In currency markets, the yuan weakened to 6.8269 to the U.S. dollar, down from Thursday's close of 6.8268.