Forget Password?
  1. Indices
  2. Commodities
  3. Currencies
Straits Times 3,114.16 -11.98 -0.38%
Hang Seng 26,719.58 -128.91 -0.48%
Dow Jones 26,817.15 -208.73 -0.77%
Shanghai Composite 2,938.14 -39.19 -1.32%
China Benchmark Index Falls Most In Two Years On Property Curbs
Perspective | 08 March 2013

China’s stocks plunged, dragging down the CSI 300 Index by the most in two years, after the government ordered more measures to cool property prices and growth in the nation’s services industries slowed.

The CSI 300, representing the nation’s biggest companies in the Shanghai and Shenzhen stock exchanges, fell 4.6 percent to 2,545.72 at the close on 4 March, the most since November 2010, while the Shanghai Composite Index slid 3.7 percent to 2,273.40, the most since August 2011. China Vanke Co, the nation’s biggest property developer, led a gauge of real-estate companies to the biggest tumble since June 2008. Anhui Conch Cement Co and Sany Heavy Industry Co dropped by more than 8 percent.

China’s cabinet on 1 March told cities with “excessively fast” price gains to raise down-payment requirements and interest rates on second-home mortgages and ordered individuals selling properties to “strictly” pay a 20 percent tax on the sale profit when the original purchase price is available, a levy that is being easily avoided.

“When there are new rules like these, it extends far beyond property shares,” Zhang Yanbin, an analyst with Zheshang Securities Co in Shanghai, said by phone on 4 March. “There have been talks of property measures in the past few weeks, leading to declines in the market. The news over the weekend was evidence of a detailed measure, hence the loss is much bigger.”

The Shanghai index’s losses pared gains for the year to 0.2 percent. The benchmark measure had rallied as much as 24 percent from an almost three-year low on 3 December 2012 on speculation the nation’s economic growth would rebound from the slowest pace since 1999.

A purchasing managers’ index released on 3 March showed the nation’s services industries expanded at the slowest pace in five months. A government manufacturing PMI gauge released in the week ended 1 March missed estimates. Chinese legislators began an annual conference during the week ended 8 March, during which the government usually announces economic targets for the year.

Join The Conversation
The Shares Investment editorial team welcomes constructive feedback on our coverage and content. We would also be delighted to answer any questions on the above article. Leave us a comment below, and we'll get back to you shortly!

All Rights Reserved. Pioneers & Leaders (Publishers) Pte Ltd. Best viewed with Mozilla Firefox 3.5 and above.