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Index falls on liquidity crunch and outlook
Aggregated Source: Shanghai Daily: Business

SHANGHAI stocks yesterday fell for the first time in five days amid concerns about China's economic outlook and month-end liquidity crunch.

The Shanghai Composite Index fell 0.27 percent to 2,317.75 points.

"Optimism over economic growth depressed the market, especially cyclical stocks which are sensitive to business cycles," New Times Securities said yesterday.

The Organization for Economic Cooperation and Development on Wednesday joined the International Monetary Fund to cut China growth forecast this year to 7.8 percent, down from 8.5 percent. The IMF also slashed its view for China's 2013 economic growth to 7.75 percent from 8 percent.

Shares also fell on a month-end liquidity crunch. The seven-day repurchase rate, a gauge of interbank funding availability, gained 47.40 basis points, the biggest rise in over a week, to 4.14 percent in Shanghai yesterday as banks were accumulating cash to meet month-end requirements.

Steel prices dropped on weak demand. Fushun Special Steel Co fell 2.2 percent to 5.69 yuan (93 US cents). Xining Special Steel Co declined 1.5 percent to 4.66 yuan. Inner Mongolia BaoTou Steel Union Co shed 1.4 percent to close at 4.86 yuan.

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Copyright Shanghai Daily: Business