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Monday, August 31, 2009
China Stocks Tumble as Market Concerns Mount
By Joanna Ossinger
FOXBusiness
Chinese stocks tumbled in Monday, falling 6.7% to a three-month low, amid concerns about liquidity and share supply.
The Shanghai Composite fell below its 125-day moving average, a measure many investors in China use to determine the difference between a bull and bear market, Reuters noted.
News came out that Metallurgical Corp.of China wants to hasten its potential $2.5 billion offering of A shares. A shares are mostly available just to domestic investors, but there have been worries lately about possible oversupply.
In addition, some investors are becoming concerned that Chinese banks may be pulling back on the credit that they’ve been doling out fairly freely to help jump-start the economy, The Wall Street Journal said.
Many Chinese companies saw their American depositary receipts fall in the wake of the declines in Asia. For instance, China Telecom (CHA), China Life Insurance Co. (LFC) and China Petroleum & Chemical (SPC) ADRs were lower as of midafternoon trading in New York.
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