Chinese share prices were sharply lower Thursday, with blue chips sinking and losers far outnumbering gainers, on concern that the central bank might raise interest rates again over the coming weekend.

 

The benchmark Shanghai Composite Index, which includes A and B shares, plunged 2.7 percent, or 137.50 points, to close at 4,958.04 points. The intra-day low was 4,954.36 points.

 

The Shenzhen Component Index on the smaller Shenzhen Stock Exchange ended at 16,035.19 points, down 4.73 percent, or 796.38 points.

 

Losses outnumbered gains by 729 to 86 in Shanghai and 557 to 92 in Shenzhen.

 

The combined turnover of the two bourses dropped to 156.98 billion yuan (about 21.3 billion U.S. dollars) from Wednesday's 164.46 billion yuan.

 

Zhou Xiaochuan, governor of the People's Bank of China (PBOC), China's central bank, recently said that the bank was studying the possible effect of further interest rate hikes against surging consumer prices. The PBOC has raised rates five times so far this year.

 

Property shares were especially hard hit, slumping for a second day. Vanke, China's leading developer, fell 5.22 percent to 29.40 yuan, Poly Real Estate dropped 8.77 percent to 59.79 yuan, and Gemdale, another major developer, fell 6.41 percent to 40.75 yuan.

 

Real estate stocks posted large losses Wednesday after the PBOC and the China Banking Regulatory Commission (CBRC) announced a new move to crack down on speculative mortgage activity.

 

Profit-taking sank steel stocks, with Baoshan Steel down 6.76 percent to 15.86 yuan, Wuhan Steel down 5.85 percent to 16.09 yuan and Baotou Steel down 4.97 percent to 7.27 yuan

 

Lin Jian, an analyst with the Shenzhen-based Jiangnan Securities, said that the market might experience a powerful rebound, as funds put into PetroChina, which accounts for nearly a quarter of the total weight of the benchmark index, exceeded the money taken out. PetroChina, however, slid 1.96 percent to 30.35 yuan on Thursday, which helped pull down the index.

 

There was almost a tone of panic in the market, and stocks would likely fluctuate in the near future, according to Beijing Shoufang Securities.

 

(Xinhua News Agency December 13, 2007)