[分享]Stock slump continues in panic selling
<p align="center"><font face="宋体"><img src="http://www.ebigear.com/images/newspic/2008/01/22/42123/200801221226152d3e.jpg" border="0" alt=""/></font></p><br/><p><font face="宋体">Chinese investors continue to dump shares in panic sellings on Tuesday, driving the key Shanghai index down as much as 7 percent after a 5 percent loss in the previous session. </font></p><br/><p><font face="宋体">The benchmark Shanghai Composite Index nose-dived 6.9 percent within 30 minutes of the opening of trading, to 4,575.53 points, the sharpest fall in half a year. It recovered part of the loss to regain the 4,700-mark, as bargin-hunters return.<br/> <br/>Analysts blamed the sell-off on investors' growing worries over excessive liquidity in the country's equity market, as policymakers have shifted to a "tight" monetary policy from the decade-old "prudent" one to prevent the economy from overheating and tame inflation. </font></p><br/><p><font face="宋体">Coupled with less money available for investment was an increasing supply of shares.</font></p><br/><p><font face="宋体">Ping An Insurance, listed in both Shanghai and Hong Kong, announced on Monday a plan to raise some 150 billion yuan through new shares and bonds, the largest re-financing plan in the history of the country's stock market.</font></p><br/><p><font face="宋体">That sparked fears that other big firms might follow suit, resulting in a jump in the number of outstanding shares. In theory, when supply outstrips demand, the price will fall.</font></p><br/><p><font face="宋体">Another negative factor is concerns about the impact of a potential US recession on the Chinese economy.</font></p><br/><p><font face="宋体">Fears are mounting in the United States that the sub-prime crisis might pull the country's economy into a recession, prompting President George W. Bush to call for up to $150 billion in tax relief for consumers and business to boost the economy.</font></p><br/><p><font face="宋体">China's exports will be badly hit if consumer demand weakens in the US -- a major destination for Chinese exports, Zhang Tao, deputy head of the international department of the People's Bank of China, told a financial forum during the weekend.</font></p><br/><p><font face="宋体">A drop of 1 percentage point in US economic growth would shave 1.3 percentage points from China's growth rate due to lower exports, Citigroup estimates.</font></p>
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