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Index ends down but sees year's best month
Aggregated Source: Shanghai Daily: Business

SHANGHAI stocks declined yesterday, paring the biggest monthly gain in five months, as investors stayed on the sidelines ahead of today's release of industrial data. Banking and property shares fell.

The benchmark Shanghai Composite Index lost 17.15 points, or 0.74 percent, to 2,300.59. The index ended May with a 5.63 percent gain, its biggest monthly advance since December.

"A wait-and-watch mood prevailed in the market as investors wait for new manufacturing data for cues on China's economic condition," Dongguan Securities analysts said in a report yesterday.

China is due to release the official Purchasing Managers' Index today. The HSBC Flash PMI, the earliest indicator for industrial activity, fell in May to 49.6, slipping into contraction territory for the first time since October.

The market was also dragged down by a liquidity crunch. The seven-day repurchase rate, a gauge of interbank funding, gained 0.63 of a percentage point to a five-week high of 4.81 percent in Shanghai yesterday after the People's Bank of China withdrew a net 17 billion yuan (US$2.77 billion) from the money market this week.

Banks were among the market's decliners. The Industrial and Commercial Bank of China, the country's biggest lender, shed 0.5 percent to 4.18 yuan.

Property developers took a hit after media reports on an expansion of the property tax trial. Poly Real Estate fell 2.8 percent to 12.47 yuan.

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Copyright Shanghai Daily: Business