Shanghai Daily news

Property stocks bore the brunt of the slump in the Shanghai stock market yesterday as they were badly hit by the central bank's decision to raise interest rates. Retail stocks were also victims of the new rate policy.
The Shanghai Composite Index, which tracks both yuan-denominated A and hard-currency B shares, dropped 1.15 percent to 1,305.29. The A-share Index also withdrew 1.1 percent to 1,370.46, while the B-share Index slumped 5.7 percent to 80.24.
Last Thursday, the People's Bank of China raised the one-year lending rate by 0.27 percentage point to 5.58 percent for the first time in nine years. The rate became effective last Friday. The one-year deposit rate rose to 2.25 percent from 1.98 percent, the first increase since July 1993.
Stocks in the real estate were badly affected by the rise in rates, said Zhang Qi, an analyst at Haitong Securities Co Ltd.
Most real estate companies lost nearly 15 percent in the last two trading days, Zhang said.
Real estate developer Shanghai Lujiazui Finance & Trade Zone Development Co dived 9.15 percent to close at 7.25 yuan while Shanghai Jinqiao Export Processing Zone Development Co shed 7.98 percent to 6 yuan. Shanghai Xinmei Real Estate Co lost 7.56 percent to 4.16 yuan.
Zhang also cautioned that the rates rise would reduce listed firms' earnings "by around 5 percent, especially for industries whose net profit margins are thinner than the loan interest rates, such as retail enterprises."
Retailer Dashang Group Co nearly fell to the daily trading limit, plunging 9.99 percent to close at 9.91 yuan.