Chinese stocks drop by 9% US stocks down 400 points!

bd popeye

The Last Jedi
VIP Professional
Chinese stock plummeted by 9% today. The effect of this drop was felt worldwide. The US stock market plunged at one point by 546 points. But US stocks did recover by 100 + points by closing.

Ok all you Chinese economist..What caused this plunge??? Is the Chinese market over sold? Where the profiteers in action? Just what happened?

No country bashing or insulting remarks! Intelligent and sane conversation please!

Please, Log in or Register to view URLs content!


SHANGHAI, China Feb 27, 2007 (AP)— Shanghai's benchmark stock index plunged nearly 9 percent on Tuesday, its biggest drop in more than 10 years, as investors unloaded stocks to lock in profits after recent gains.

The Shanghai Composite Index tumbled 8.8 percent to close at 2.771.79, its largest single-day decline since it fell 9.4 percent on Feb. 18, 1997, just after the death of Communist Party elder Deng Xiaoping.

The Shanghai index had gained 1.4 percent on Monday to 3,040.60, extending a spate of record high closes.

On China's smaller exchange, the Shenzhen Composite Index plummeted 8.54 percent Tuesday to 709.81.

Chinese share prices doubled last year as investors piled into the market following the completion of shareholding reforms that helped to reduce worries over a potential flood of shares entering the market.

But the markets have become increasingly volatile.

Market heavyweights plunged Tuesday on heavy selling by institutional investors, which in turn spooked retail investors.

"The most important reason for today's decline was pressure for profit-taking," said Peng Yunliang, a senior analyst at Shanghai Securities.

"People viewed 3,000 as a psychological benchmark. It's understandable they might want to pull back after the market hit that peak," Peng said.

Large-cap Baoshan Iron & Steel hit the 10 percent downside limit at 9.03 yuan, CITIC Securities fell 9.7 percent to 36.21 and China Life Insurance declined 9 percent to 33.89 yuan.

Airline shares were battered after light, sweet crude for April delivery gained a cent to US$61.40 a barrel, a two-month high, on the New York Mercantile Exchange.

Air China slid 10 percent to 6.79 yuan and China Southern Airlines lost 5 percent to 5.81 yuan.

China still limits foreigners' purchases of the yuan-denominated stocks that make up the biggest share of the markets, though that is gradually changing as regulators allow increasing participation by so-called qualified foreign institutional investors.


Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Please, Log in or Register to view URLs content!


By MADLEN READ AP Business Writer

NEW YORK Feb 27, 2007 (AP)— Stocks plummeted Tuesday, briefly hurtling the Dow Jones industrials down nearly 550 points as Wall Street succumbed to a global market plunge sparked by growing concerns that the U.S. and Chinese economies are cooling and that equities prices have become overinflated.

A 9 percent slide in Chinese stocks, which came a day after investors sent Shanghai's benchmark index to a record high close, set the tone for U.S. trading. The Dow began the day falling sharply, and the decline accelerated throughout the course of the session before stocks took a huge plunge in late afternoon as computer-driven sell programs kicked in.

The Dow fell 546.02, or 4.3 percent, to 12,086.06 before recovering some ground in the last hour of trading to close down 400.16, or 3.17 percent, at 12,232.10, according to preliminary calculations. Because the worst of the plunge took place after 2:30 p.m., the New York Stock Exchange's trading limits, designed to halt such precipitous moves, were not activated. The decline was the Dow's worst since Sept. 17, 2001, the first trading day after the terror attacks, when the blue chips closed down 684.81, or 7.13 percent.

Investors' dwindling confidence was knocked down further by data showing that the economy may be decelerating more than anticipated. A Commerce Department report that orders for durable goods in January dropped by the largest amount in three months exacerbated jitters about the direction of the U.S. economy, just a day after former Federal Reserve Chairman Alan Greenspan said the United States may be headed for a recession.


Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed
 

jwangyue

Junior Member
Chinese stock plummeted by 9% today. The effect of this drop was felt worldwide. The US stock market plunged at one point by 546 points. But US stocks did recover by 100 + points by closing.

Ok all you Chinese economist..What caused this plunge??? Is the Chinese market over sold? Where the profiteers in action? Just what happened?

No country bashing or insulting remarks! Intelligent and sane conversation please!

Please, Log in or Register to view URLs content!




Please, Log in or Register to view URLs content!

BD, The current Chinese Equity market is more like Wall Street in the 1920s. There is a lot of growth, but not enough legislation or enforcement. Consequently inside tradings and market manipulations are very prevlent! In addition, many people have been burnt in the stock market many times before, as a results, there are many more speculators than investors in the Chinese Equity Market.

3000 point has been a mental barrier in my speculators mind, in an effort of profit taking, we are seeing broad specutrum sold off.

To make matters worse, people felt that both Chinese and US economy are cooling off from the red hot growth in the past couple of years. That furthur erode the confidence and since world economy is all interconnected. If US is getting a cold, pretty much the whole world is going to cough.

Things will get better though. Hoepfully, it will start rebouding before the end of the week.
 
Last edited:

AmiGanguli

Junior Member
There has also been lot of nervousness that the government will try to limit speculation.

Basically you've got a lot of regular folks borrowing money to cash in on the booming market, creating a huge speculative bubble. This knowledge, plus the nagging concern of government intervention to limit the size of the bubble, creates a lot of nervousness. Nobody wants to sell too early for fear of missing out on profits, but everybody is hyper-sensitive to signs of a downturn.

... Ami.
 

bd popeye

The Last Jedi
VIP Professional
Intresting replys guys. Personally I just think this was started by proft taking in China and has spread world wide. It just happens to be a tremendous amount of money.

If US is getting a cold, pretty much the whole world is going to cough.

Excellent comment. No matter what anyone thinks>> It's those green American dollars that makes makes the world ecomomies go around.
 

bd popeye

The Last Jedi
VIP Professional
well that is not good.

Sorry that you feel that way. But that's the truth.

As an example if the state of California(pop 35 million) was a country all to itself it would be the fifth largest ecomomy in the world.

Please, Log in or Register to view URLs content!


Sorry for the dated facts . But I'm sure that info still is true.

One last example for I have to go to work...

I've been to 20+ countries in the world. I have never been to one where I could not spend the US dollar. Not one. But try to spend a Euro, yuan, Germark or Yen anywhere in the US or anywhere but those currencies country of origin.... You cannot do it....

And that's because ..well read my previous post..
 

Ryz05

Junior Member
They covered this on New York Times, and everybody's talking about it. From what I heard, the stock market was booming just before the mass sell-off, which led to the drop. This created a cascading affect in Europe, then the United States. Japan and other Asian countries were less affected. Contributing factors also include warnings from the government about blind optimism, overheating economy, etc. The major items affected were large appliances like washing machines, and people say it should rise to the top again in two weeks.
 

Schumacher

Senior Member
Some Chinese government officials have been making noises lately abt the stock market being in a state of bubble & hinted regulations might be coming to curb it. That contributed to the plunge.
I've missed out big time on this last 6-9 months rise so won't mind too much to see them fall back so I can get in. :)
I also have a few tiny shorts now.
 

jinpei

New Member
Tell me about it, the office was a nervous wreck today. Just to show how Asia can affect the rest of the world in general. We are all in one boat. :nono:
 

tphuang

Lieutenant General
Staff member
Super Moderator
VIP Professional
Registered Member
man, it hurts, I lost like $300 today. I was so pissed off. I blame it all on the communist government.
 
Top