During the last trading session of July 2008, both the Shanghai and the Shenzhen stock markets retreated by more than 2%, extending their losses for a third straight session.

The Shanghai Composite Index plunged 60.95 points, or 2.15%, to close at 2,775.72, while the Shenzhen Component Index slashed 245.46 points, or 2.53%, to close at 9,470.33.

Trading in PetroChina, which contributes heavily to the index, was suspended during the session. Other than China Life, which closed slightly higher, no large-caps escaped the broader decline unscathed. An overnight spike in oil prices hit refiners and airlines hard. Both Sinopec, Asia’s top refiner, and Air China, the country's biggest international carrier, slid by more than 5%.

The CSI 300 Index, which tracks yuan-denominated A-shares listed on both of China's exchanges, managed to stay above the 2,800 point level, closing at 2805.21, down 2.74%.

Due to the U.S. federal government's actions backing the credit markets and a better-than-expected job data report from the U.S. private sector, Wall Street extended its gains overnight despite the spike in oil prices. Nevertheless, climbing U.S. and Asian markets were unable to lift the Chinese markets.

Both the Shanghai and the Shenzhen B-Share Stock Price Indexes, which track the daily price performances of B-shares available for investment by foreigners, slid by more than 1%.


Source: Economic Information Daily

Date: 1 Aug 2008

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