Markets drop as China vows not to support property prices, vaccine related shares rise on H1N1 concerns
Chinese markets dropped, following an announcement from a Ministry of Housing official that the government would not help support Chinese property prices.
The Shanghai Comprehensive Index dropped 2.7 percent to 2763.53. The Hang Seng Index retreated 2.1 percent to 20588.41.
The Hang Seng Growth Enterprises Index fell 2.68 percent to 633.43. The Hang Seng China Enterprise Index, representing mainland companies listed in Hong Kong, lost 2.52 percent to 11752.65.
Taiwan's TAIEX Index declined 0.83 percent to 7284.61.
Jiangxi Copper Co.(SH:600362; HKG:0358), China's biggest producer of the metal, fell 5.62 percent in Shanghai trading and 3.29 percent in Hong Kong trading. Shanghai copper futures lost 2.64 percent today. Investors worry that metal futures will repeat the plunge they took last October, when they hit the 5 percent trading floor for eight consecutive days.
Aluminum Corp. of China (SH:601600;HKG:2600), the nation's biggest producer of the metal, declined 3.95 percent in Shanghai and 3.13 percent in Hong Kong. Shanghai Aluminum futures declined 1.19 percent.
Zijin Mining (SH:601899;HKG:2899), the country's largest gold producer, retreated 3.92 percent in Shanghai and 2.99 percent in Hong Kong. Zhongjin Gold (SH:600489), the second-largest, dropped 5.84 percent.
Xiamen Tungsten Co.(SH:600549), world's largest tungsten processor, plunged 7.50 percent. Hunan Nonferrous Metals Co.(HKG:2626) lost 3.07 percent.
Property shares dropped as Qi Ji, China's Vice-Minister of Housing and Construction, said that China would not to support high house prices. Mainland-listed developers lost 3.13 percent on average and the Hang Sang Property Index declined 2.56 percent. Mr Ji said that local governments will be encouraged to increase the supply of ordinary housing and make their plans public so that the market can anticipate changes in housing supply.
Frank Gong, vice chairman of JP Morgan Chase & Co.'s investment banking business in China, also told Shanghai Securities Journal that he does not think house prices will rise in the coming three months.
Sun Hung Kai Properties (HKG:0016), the world's biggest developer by market value, fell 2.99 percent. Greentown China Holdings (HKG:3900) dropped 6.12 percent. China Vanke Co.(SZ:000002), the largest mainland-listed developer, dropped 3.10 percent. Poly Real Estate Group Co.(SH:600048), the second-largest, lost 3.30 percent. Cinda Real Estate Co.(SH:600657), a Beijing-based developer, plunged 8.55 percent.
Da An Gene Co. of Sun Yat-Sen University (SZ:002030), a vaccine producer, climbed 6.92 percent today as fears increased of a second wave of swine flu. The head of the Centre for Health Protection, Dr Thomas Tsang, has warned that a second wave of swine flu might hit Hong Kong early next year.
Meanwhile, another swine flu related death has been reported. The victim, a 66-year-old man, who was also suffering from diabetes and a heart condition, died on Sunday at Yan Chai Hospital in Hong Kong. In mainland China it is unclear on the number of swine flu fatalities due to suspected reporting restrictions.
Hualan Biological Engineering (SZ:002007) rose 4.37 percent. Shenzhen Neptunus Bioengineering Co.(SZ:000078) advanced 3.19 percent.
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