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Stocks hit as stimulus hopes quashed

2013-07-22 08:15 Global Times Web Editor: qindexing
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Chinese mainland bourses shed value Friday, with the Shanghai Composite Index once again dipping below 2,000 points.

The Shanghai Composite Index dropped 30.75 points, or 1.52 percent, to 1,992.65; while the Shenzhen Component Index shed 240.28 points, or 3.04 percent, to end at 7,663.99 at Friday's close.

The total trading volume of the two exchanges reached 209.5 billion yuan ($34.13 billion), up 7.5 billion yuan on Thursday's trading.

Aviation, manufacturing, cement and real estate suffered the greatest; while overall gains were seen in IT, travel, media, entertainment and telecom stocks.

Trading of shares in Avic Real Estate was halted according to China Securities Regulatory Commission's limit-down regulation, which prevents further trading if a stock's value falls by 10 percent in a single trading day. China Vanke Co's stock price fell 5 percent.

Two major reasons for the decline cited by experts were China's minister of finance, Lou Jiwei, denying the possibility of a large scale stimulus package at the G20 ministerial meeting, and word that the government is to expand property tax trials after implementing them in Shanghai and Chongqing.

Analysts predicted that stocks could rally Monday on news released late Friday that rules governing financial institution loan rates are to be relaxed.

The People's Bank of China, the country's central bank, said the move will make it easier for domestic businesses to obtain finance, will support the real economy and improve economic restructuring.

However, not all experts were so optimistic. "Lifting controls on lending interest rates does not guarantee that companies will have easy access to funds," Tan Yalin, chief of China Forex Investment Research Institute, said in a recent interview.

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