Chinese shares down 3.6% ahead of CPI release
Updated: 2008-03-10 15:41
Chinese shares prices were sharply lower on Monday, as investors feared a higher inflation in February could trigger further tightening measures.
The benchmark Shanghai Composite Index, which covers both A and B shares on the Shanghai Stock Exchange, tumbled 154.22 points, or 3.59 percent, to 4,146.30.
The index fell 4.19 percent at one time before bargain hunting trimmed some losses in late afternoon trading. The decline, the steepest in two weeks, sent the key index to the seven-and-a-half-month low.
The Shenzhen Component Index on the smaller Shenzhen Stock Exchange plunged 697.80 points, or 4.48 percent, to 14,863.05.
Losses outnumbered gains by 768 to 81 in Shanghai and by 609 to 58 in Shenzhen. Aggregate turnover stood at 139.21 billion yuan, almost flat from last Friday.
The closely-watched February's consumer price index (CPI), a main gauge of inflation, is to be released on Tuesday, according to the National Bureau of Statistics (NBS) website.
The CPI surged to the 11-year monthly high of 7.1 percent in January. A Bank of China report forecast the figure would hit 8.3 percent in February.
The producer price index, also a key inflation indicator, rose 6.6 percent in February, the fastest in more than three years, and up from 6.1 percent in January, the NBS said on Monday.
Analysts believed the inflationary pressure would continue to remain for some period of time and this may spark further tightening measures. The Bank of China forecast in a separate report that China was likely to raise interest rates once or twice in the first half of the year.
Premier Wen Jiabao said in the 2008 Government Work Report on March 5 the major task of this year's macro-control is to prevent the overall price level from rising rapidly.
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