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  • Nov 1, 2014
  • Updated: 5:07pm
H7N9 avian flu
BusinessMoneyMarkets & Investing

Bird flu, property curbs hit Shanghai market

PUBLISHED : Monday, 08 April, 2013, 12:33pm
UPDATED : Monday, 08 April, 2013, 4:16pm

China’s onshore market slumped on Monday when trading resumed after the four-day Qingming festival, when stocks were hit by bird flu jitters and by fresh moves to curb Beijing’s housing sector.

The benchmark Shanghai Composite Index lost 1.26 per cent to 2,197.38, trading below the physiological 2,200 mark for the first time since December last year. The index only traded for the first three days of last week, closing on Thursday and Friday for the Qingming, or gravesweeping, festival.

Since the closure, more cases of H7N9 have been reported, bringing the total to 21, of which 10 were reported since last Thursday, intensifying fears that the country could face a deadly virus.

More short sellers joined the fray early on Monday, shorting airlines, poultry firms, which were seen as frontline casualties of any widespread outbreak of the new bird flu variant. So far, six people have died from H7N9.

Mainland carriers slumped, on speculation that tourism and business travel would fall in the affected region, including the nation’s financial centre Shanghai. Air China lost 5.1 per cent to 5.06 yuan, while China Southern Airlines dropped 3.7 per cent to 3.4 yuan.

The disease also hit Taiwan, with the benchmark Taiex Index losing 2.25 per cent to 7,764.00 as of 11:15 am, marking its biggest decline since June 4 last year, and the biggest daily drop of major Asian markets in morning trade.

Taiwan carriers took an even bigger hit, with China Airlines off 6 per cent, EVA Airways Corporation down 6.8 per cent as of 11:15 am.

In Hong Kong, the Hang Seng China Enterprises Index, which tracks major mainland listed firms, was little changed after a 3.1 per cent decline last Friday.

China’s biggest property player was also hit after the Beijing municipal government announced on Sunday that it would tighten the supply of public accumulation fund loans to second home buyers.

As a result of the tightening, individuals buying a second home, have to pay at least 70 per cent of the property value, up from previous 60 per cent previously.

China Vanke, the nation’s biggest property developer by market value, lost 1.9 per cent to 10.99 yuan as of the lunch break.

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