Economy

China's stocks hit record low

(Xinhua)
Updated: 2011-01-17 19:11

BEIJING -?China's stocks hit a record low in four months Monday, with banking and property stocks slipping, after the central bank announced a rise in lenders' required reserves and talk of a property tax in Shanghai.

An investor is seen at a stock trading hall in Hangzhou,capital of East China's Jiangsu province on Jan 17, 2011. [Photo/Xinhua]

The benchmark Shanghai Composite Index was down 3.03 percent, or 84.68 points, to finish at 2,706.66 points.

The Shenzhen Component Index closed down 4.55 percent, or 559.54 points, to end at 11,734.62 points.

Combined turnover expanded to 182.30 billion yuan ($27.66 billion) from 161.97 billion yuan on the previous trading day.

Losers outnumbered gainers by 844 to 62 in Shanghai and 1094 to 65 in Shenzhen.

Banking and property stocks were hit hardest.

The People's Bank of China (PBOC), or the central bank, said Friday that it would lift the banks' reserve requirement ratio by 50 basis points as of Jan. 20.

It was the fourth time in the last two months, and the first time in 2011, that the PBOC has moved to stem excessive liquidity in the market amid mounting inflationary pressures.

The Industrial and Commercial Bank of China, China's biggest lender, dropped 2.76 percent to close at 4.23 yuan per share.

China Construction Bank fell 4.07 percent to close at 4.71 yuan per share.

Shanghai's mayor said on Sunday that one of the municipal government's main tasks this year will be preparation for a trial run of a property tax to curb speculation in real estate sector.

Home prices in 70 major Chinese cities rose 0.3 percent month on month in December and 6.4 percent year on year, the National Bureau of Statistics said Monday, triggering concerns of further property sector tightening.

Property stocks slid across the board. China Vanke, the country's biggest property developer by market value, fell 6.96 percent to 8.42 yuan. Poly Real Estate Group dropped 8.66 percent to 13.6 yuan.