China stocks fall further, down 11% in 2010 so far
China’s stocks fell further on Tuesday, driving the benchmark index to an almost six month low. The Shanghai Composite Index slumped 63.16, or 2.1%, to 2,906.35 at the 11:30 a.m. break, set for its lowest close since October 12. The measure has plunged 11% in 2010, the world’s fourth worst performer.
Main concerns are government measures to cool the property market will damp consumer spending and curb demand for raw materials. China has also been unwinding monetary stimulus and stepping up measures to prevent a housing bubble inflated by record lending last year.
China has ordered higher mortgage rates and down-payment ratios since property prices jumped 11.7% in March, the most since comparable data began in 2005. The government has also barred loans for third-home purchases and reinstated a sales tax on homes.
“Some institutional investors are selling for lack of confidence in economy,” said Li Lei, an analyst at China Securities Co. in Beijing. “Airlines account for quite a big proportion of institutional investors’ portfolios and they have made quite a lot of profit.”
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