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!
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!
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.
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