| Yuan hits new record high; stocks fall on jitters in property sector |
SHANGHAI, Jan. 17 (AP) -- The Chinese currency climbed to a new high against the U.S. dollar for the third straight day Wednesday on speculation that the country's surging trade surpluses could prompt Beijing to ease limits on the yuan's rise.
Stocks fell as investors sold to lock in profits, particularly in the real estate sector, after the government said developers would have to pay up land value-added taxes on property developments already completed and sold.
In currency dealings, the dollar was at 7.7788 around 0740 GMT on the over-the-counter market, down from Tuesday's close of 7.7900. During the day it touched a record low of 7.7782.
Traders said the market was interpreting Beijing's official responses to the release of data showing China's overall trade surplus surged 74 percent to a record US$177.5 billion last year as a signal the yuan may be given more room to rise this year.
China limits daily movements in the yuan's U.S. dollar value to 0.3 percent above or below a daily rate set by the central bank each trading day. Critics of Beijing's foreign exchange restrictions argue that the yuan is undervalued, giving Chinese manufacturers an artificial price advantage.
In share trading, the benchmark Shanghai Composite Index shed 1.5 percent to 2,778.90. The Shenzhen Composite Index also fell 1.5 percent, to 642.58.
Turnover on the Shanghai index hit a record 98.32 billion yuan (US$12.6 billion), compared with 84.49 billion yuan (US$10.9 billion) on Tuesday, reflecting divergent views of the market's outlook, analysts said.
"Profit-taking risks will become high once the benchmark index rises above the psychological level of 2,800," said Wu Ang, an analyst at CITIC Securities.
The move to tighten tax controls on developers triggered a knee-jerk slump in the sector. China Vanke fell by 10 percent, the daily limit, to 17.28 yuan; Poly Real Estate Group also dropped 10 percent to 52.03 yuan and China Merchants Property Development likewise sank 10 percent, to 26.20 yuan.
Meanwhile, Xinjiang Bayi Iron & Steel jumped 10 percent to 6.17 yuan Wednesday after saying that Shanghai Baosteel Group Corp. plans to acquire a 69.61 percent stake in its state-owned parent Xinjiang Bayi Iron & Steel Group for 3 billion yuan (US$128.5 million).
Baoshan Iron & Steel, the listed unit of Baosteel Group, gained 1.9 percent to 9.34 yuan.
|
|
