Pharma leads falls in Shanghai, banks bring down Hang Seng on bad loan concerns
Mainland China's stocks dropped for a second day, led by pharmaceutical and non-ferrous metal shares, dragging the benchmark index to a three-week low. Bank shares also dragged the Hang Sang Index lower.
The Shanghai Comprehensive Index declined 1.89 percent to 2842.72. The Small and Medium Enterprizes Comprehensive Index dropped 3.04 percent to 4627.07.
The Hang Seng Index slid 0.49 percent to 21595.52. The Hang Seng Growth Enterprises Index lost 0.56 percent to 657.68. The Hang Seng China Enterprises Index declined 0.64 percent to 12431.81.
Taiwan's TAIEX Index lost 1.24 percent to 7376.76.
Mainland-listed pharmaceutical shares dropped 3.77 percent on average, with vaccine producers the worst-performers. Da An Gene Co.(SZ:002030) plunged 9.81 percent. Shenzhen Neptunus Bioengineering Co.(SZ:000078) lost 9.25 percent. Apeloa Company Limited (SZ:000739) dropped 8.58 percent.
Sino Biopharmaceutical (HKG:1177) declined 2.54 percent. China Pharmaceutical Group (HKG:1093) lost 3.51 percent. China Shenwei Pharmaceutical Group (HKG:2877) dropped 4.79 percent.
Mainland-listed nonferrous metal shares dropped 3.54 percent on average. Jianxi Copper Co. (SH:600362; HKG:0358), China's largest producer of the metal, lost 3.79 percent in Shanghai and 1.19 percent in Hong Kong.
Chalco (SH:601600;HKG:2600), the nation's largest aluminum producer, dropped 3.40 percent in Shanghai trading. Hunan Nonferrous Metals Co. (HKG:2626) declined 2.10 percent.
HSBC (HK:0005), Europe's largest bank, lost 1.04 percent in Hong Kong trading.
Industrial and Commercial Bank of China (SH:601398; HKG:1398), the world's largest lender, declined 0.41 percent in Shanghai and 0.82 percent in Hong Kong. The bank said it is negotiating with Huarong Asset Management Co., a state-owned bad-debt manager, for the repayment of RMB313bn (US$46 billion) of bonds due as early as this year.
Huarong hasn't decided whether to pay back the bonds in cash to ICBC or to roll over the debt, which is guaranteed by the government, reported Bloomberg today citing Gu Shu, board secretary of Beijing-based ICBC.
China Construction Bank (SH:601939) lost 1.39 percent in Shanghai and 0.77 percent in Hong Kong. CCB, the world's second-biggest lender, yesterday said that the Ministry of Finance has allowed Cinda Asset Management Co., a separate bad-debt manager, to extend the maturity of RMB247bn of bonds due that day by a decade. The interest on the debt was left unchanged at 2.25 percent.
Cleantech shares made considerable gains after President Hu Jintao gave a speech at the UN in New York yesterday promising to put a "notable" brake on Chin's rising carbon emissions. FangDa Carbon New Material (SH:600516) was up 4.03. SUFA Technology Industry (SZ:000777) and Shenzhen Woer Heat-Shrinkable Material (SZ:002130) both rose to their 10 percent daily limit.
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