Breaking News – Sharp falls in Shanghai and Shenzhen stock markets after the Sichuan disaster
After maintaining steady levels for one week, the Shanghai and Shenzhen share markets saw a steep fall on the 20th of May. The Shanghai index fell through 3600 and 3500 within one day, and ended on 3445.13, with a total drop of 4.48%, a total of 161.6 points for the day.
The Shenzhen index fell under 13000, and ended the day with 12449.81, a drop of 5.67%.
Since the earthquake in Sichuan Wenchuan on May 12th which measured 7.8 on the Richter scale, the Chinese stock market was faced with sharp falls. After the disaster, major corporates, stock brokers, and financial institutions headed for a trend of dumping their holdings. However, they soon received directives from the Securities Regulatory Commission to “be political” and maintain steadiness of the stock markets, thus the situation was forcibly reversed into a trend of purchases.
Meanwhile, tens of millions of medium to small investors have refused to dump their holdings, to resist against making profits from the national disaster, and to comfort the victims of Sichuan’s earthquake. This was despite the continuous fall in China’s share market which began in October 2007 when the index was 6000.
After bare maintenance for six days around 3600 points, on the 20th of May, the Shanghai stock market finally saw a steep fall. According to market experts, it has been apparent that the trend of sell outs came from investors in organizations and institutions, who have held 50% of the market value in China.
The above news was brought to you by Yan Ning for Breaking News on SOH radio network.
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