Source: CCTV.com

09-02-2008 11:25

In free-fall, that just about describes stock markets on the mainland at the moment. Both the Shanghai and Shenzhen bourses began to drop at their opening only rebounding at the close on Monday. The Shanghai Composite now stands barely above 2,300 points.

Both the Shanghai and Shenzhen bourses began to drop at their opening only rebounding at the close on Monday.

A slump came just after 3 days of upward sessions, and kicked off September's trade with a Black Monday. The benchmark Shanghai Composite and Shenzhen Component both lost over 3 percent, eating up gains made in the last 3 trading days. Banking sectors are recording drops bigger than the benchmark index. While securities and insurance issues, which were strong last week, are fast running out of steam.

Liu Youcheng, Analyst of Beijing Hongyuan Securities said "2 major reasons behind the drop: First, last Friday's strong session has prompted many to wonder if the government will release new policies to support the markets over the weekend. But hopes have fallen short. Second, the US market slumped last Friday, forcing investors to act with caution. With the index dropping to such a level, I think there is no need to flee the market for the moment, or be too pessimistic about the future."

Meanwhile, trading volumes have been shrinking for the month of August, suggesting a wait-and-see attitude among investors. Monday saw the volume dip to a level 20 percent lower than that recorded last Friday. Analysts say current trading levels are unlikely to support a rebound. The Shanghai Composite is now 62 percent lower than last October's recorded peak. Many predict it will even find it hard to stay above 2,300 points in the near future.

 

Editor:Xiong Qu