Stocks fall over fears of counter-inflation measures
24 June 2008
The Shanghai Composite Index fell 2.5% to 2,760.42 on Monday in response to concerns about the potential impact of tougher inflation control measures on financial institutions, Bloomberg reported. The Shenzhen Composite Index also declined, closing down 1.9% at 770.94. China Merchants Bank was the biggest loser among the financial institutions, its stock plunging 3.6% to RMB23.76 (US$3.46), while Ping An Insurance slid 3.3% to RMB48.68 (US$7.08). CITIC Securities, China's largest publicly traded brokerage, dropped 3% to RMB25.16 (US$3.66). Aluminum Corp of China also struggled, closing down 5.2% at RMB12.30 (US$1.79), after announcing that its first-half profit will likely fall by more than 50%. The company blamed rising input costs - the government increased gasoline and diesel prices by 17% and 18% respectively on June 20 - and production disruptions caused by the snowstorms earlier this year.