Stocks drop for first time in seven days

Shanghai Daily - - BUSINESS - Ly­dia Chen

THE Shang­hai stock mar­ket yes­ter­day fell for the first time in seven days, weighed down by the fi­nan­cial sec­tor and profit tak­ing in ce­ment mak­ers.

The Shang­hai Com­pos­ite In­dex was down 1.1 per­cent, the big­gest drop since June 16, to 2,728.48.

Banks were weak on con­cerns de­fault risks are in­creas­ing for banks af­ter Hong Kong Eco­nomic Jour­nal re­ported yes­ter­day that an in­vest­ment firm, con­trolled by the Yun­nan pro­vin­cial govern­ment, no­ti­fied lo­cal banks that it was un­able to pay some of its short term debts.

The cri­sis was solved af­ter the pro­vin­cial govern­ment agreed to pump more money into the firm, the re­port said.

Also, China’s cen­tral bank auc­tioned 2 bil­lion yuan in one-year bills in its open mar­ket op­er­a­tions on Tues­day at a yield of 3.4982 per­cent, up 9.63 ba­sis points from last week. The rate was 24.82 ba­sis points higher than the one-year de­posit rate of 3.25 per­cent, rais­ing spec­u­la­tion the cen­tral bank may raise in­ter­est rates for the third time this year.

The In­dus­trial and Com­mer­cial Bank of China shed 0.9 per­cent to 4.46 yuan.

Ce­ment mak­ers dropped the most. An­hui Conch Ce­ment Co lost 2.4 per­cent to 27.13 yuan, re­treat­ing from a two-month high.

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