SHANGHAI: The stock market slid 3.59 percent yesterday as worries about a US economic slowdown intensified. Fears of more monetary tightening measures also dampened investor sentiment.
The benchmark Shanghai Composite Index plunged 3.59 percent to close at 4146.3 points, led by steel companies and banks. Losers outnumbered gainers by 781 to 911. The Shenzhen Component Index sank 4.48 percent to close at 14863.05. The turnover on the two bourses amounted to 138.58 billion yuan, up 0.9 percent from last Friday.
"Investors are worried about a US economic slowdown after the announcement of the country's poor data for the employment and real estate markets," said Wu Feng, an analyst at TX Investment Consulting Co Ltd.
In Japan, the Nikkei 225 index shed 1.96 percent to close at 12532.13 on worries that a US slowdown will hurt Japanese corporate earnings, analysts said.
"Corporate earnings of Chinese companies in the oil refining and power industries are not expected to be good this year as the costs are rising fast and the government is still controlling prices in these industries," said Chen Li, an analyst at Shenyin Wanguo Securities, adding that it has triggered institutional investors' concerns about a revaluation of stocks.
Investors also fear tighter monetary measures, including rises in the interest rates and bank reserve ratio.
Some analysts expect the government to raise interest rates in a few weeks. But Chen said that policy option is limited as the US is considering another rate cut.
"The capital inflow from several newly approved mutual funds is expected to inject liquidity into the market in the next one to two months," said Wu, but added the market is likely to see more fluctuations in the coming weeks.
Source:China Daily
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