HK, Shanghai Indexes Drop 3.8%

123jump.com Staff
23 Sep, 2008
New York City

Hong Kong and Shanghai stocks fell 3.8% after investors worried that the U.S. bailout plan will spread inflation around the world. Transportation stocks fell after crude oil jumped. Mining stocks rose. China to issue 25 billion yuan of treasury bonds at 3.68% interest rate.

[R]6:00AM New York, 6:00PM Hong Kong – Stocks in Hong Kong and Shanghai fell sharply on the worries that the U.S. bailout plan may be inadequate and is likely to spread inflation around the world.[/R]

Market Sentiment

In Hong Kong trading Hang Seng Index declined 3.87% or 759.35 to 18,872.85, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, fell 5.11% or 522.88 to 9,704.50. In Shanghai trading CSI 300 Index slid 3.81% or 84.14 to 2, 123.48.

Daily turnover on main-board was HK$64.4 billion from HK$91.6 billion yesterday.

China to Heighten Supervision of Exports

Xinhua News Agency reported on its Web site today that the Ministry of Commerce ordered its local agencies to strengthen quality supervision efforts at dairy products, medicines, toys, furniture products and export-oriented foods.

The development comes in the wake of tainted dairy products that affected many infants in the country. According to the Ministry, manufacturers should recall all the affected problems timely in the event that serious export goods quality occurs.

China to Float Rmb24.36 billion T-Bonds

The Ministry of Finance said it will float Rmb24.36 billion worth of book-entry treasury bonds.

The 10-year bonds will have a fixed interest rate of 3.68% and will be issued between September 22 and 24 and start trading on Friday. Interest will be calculated from September 22 and paid semi-annually, with the principal and interest to be paid at maturity.

On the overall, the book-entry T-bonds will increase to a total of Rmb927 billion.

Gainers & Losers

Hong Kong stocks fell sharply after investors worried that the U.S. bailout plan may not save the economy from slipping into a recession. An approaching storm in Hong Kong region may shut down the exchange tomorrow.

Mengniu Dairy tumbled 60.3% to K$7.95 on news that some of the milk products were tainted by a chemical that is believed to have adversely affected infants.

Gold miners rose after gold prices fell 5.1% to above $900 per ounce. Zijin Mining rose 5.3% and Sino Gold edged up 19.8%. Jiangxi Copper slumped 14% after Goldman Sachs downgraded the stock to """"sell"""" from """"buy"""".

Sinopec Corp. slid 5.5% after crude oil prices jumped to over $120 per barrel. Airlines also fell on soaring oil prices. Air China dropped 5.4% and China Southern Airlines plunged 5.6%.