Shanghai Composite Regains 2,000 Level
Citic Securities led gains for brokerages after the Shanghai Securities News reported that the China Securities Regulatory Commission lowered benchmarks for calculating capital requirements. Kweichow Moutai Co. (600519), the biggest maker of baijiu liquor, slid the most since March on speculation inventories are increasing, hurting the outlook for prices. Ping An Insurance (Group) Co. dropped to the lowest level since January after HSBC Holdings Plc said it’s in talks to sell all of its Hong Kong- traded shares in the Chinese insurance company.
About two stocks gained for every one that declined in the Shanghai Composite, which fell 0.1 percent to 2,012.90 as of 2:51 p.m. local time. It slumped to as low as 1,995.72 earlier today. The CSI 300 Index slid for a third day, losing 0.2 percent to 2,173.20.
The Shanghai gauge, the benchmark index for equities traded mostly by local investors, has declined 8.4 percent this year amid concern China’s new leadership may slow efforts to reduce the government’s grip on the economy, which expanded at the slowest pace in more than three years last quarter. The index is valued at 11 times reported earnings, according to data compiled by Bloomberg.
“The stock index breached 2,000 because there’s no concrete policy measure for the economy and liquidity is getting tighter as we approach the end of the year,” said Wei Wei, an analyst at West China Securities Co. in Shanghai. “If you can, get out of the market and don’t enter for the rest of year. There are still risks and stocks will continue declining below 2,000.”
The Shanghai Composite (SHCOMP) last breached 2,000 for less than two minutes during intraday trading on Sept. 26. It rallied 4.1 percent the following two days, the biggest gain among world equity indexes, on speculation the government would take steps to boost stocks.
China completed the most important phase of a once-a-decade power transition last week, with Xi Jinping succeeding Hu Jintao as head of the ruling Communist Party.
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