SHANGHAI — Many Chinese investors had hoped the Olympics would give a boost to their nation's sagging stock market. So far, just the opposite has happened.
The benchmark Shanghai composite index tumbled 5.3% on Monday, falling for the sixth time in seven trading sessions. The index has plunged 15% since the Beijing Games opened Aug. 8, and it now stands at 2,320 -- down 56% since the start of the year, making it one of the worst performers in the world.
"Everybody said the market would turn [positive] in July before the Games, so we listened and stayed in it," said a retired textile worker surnamed Gu, her 70-year-old eyes fixed squarely on the stock tote board at Haitong Securities in Shanghai. "In July, they said that the market's spirit would return when the Olympics came. What spirit is that? Now we are all dead and have no spirit left in the market."
Trading volume was light Monday, as it has been in recent days. Chinese airline companies, including Air China and China Eastern, were hit particularly hard after reports of weaker passenger traffic as a result of tightened visa rules.
Shares in natural resource, investment and real estate companies also slid sharply. On the Shanghai exchange only 12 stocks posted gains, while 810 were losers. On the smaller Shengzhen exchange just 19 stocks were winners and 650 were losers.
There's "no special reason" for what happened Monday, said Fan Dizhao of Guotai Asset Management Co. in Shanghai. "People just don't have a strong will to invest in the market."
In recent days Beijing has issued a batch of economic reports, but they contained nothing big or worrisome enough to warrant a steep fall. Inflation statistics showed consumer prices were edging down, but producers were paying more for goods, suggesting that corporate profits are facing a squeeze.
Yet China's exports have accelerated and retail sales continue to boom. Overall, China's economy is cooling down, but it's still growing vigorously considering the economic malaise in much of the world.
But China's stock market often moves to its own beat, without regard to the broader economic condition. For much of this decade, Chinese stocks languished even as the domestic and global economy flourished.
Then, in 2006, the Shanghai index jumped 130%, and it doubled the next year, as millions of new investors bet feverishly on big, quick returns.
