Like a petulant boy whose parents bought him the wrong-colored truck for Christmas, the Shanghai markets threw a tantrum this week, falling once again below 2,000. Wednesday saw the steepest fall – by 4.55% to 1,897.225 – as investors digested (and spat out) news of another interest rate cut – not the wrong color, but rather smaller than investors had hoped for. The SCI closed today at 1,851.52, its lowest close in more than a month.
Bad news for the market has historically meant bad news for Anhui Conch Cement (600585.SH), and that was no less true this week. Falling almost 10% over the week, Anhui Conch is now trading at a 55% discount from its June 3 price. Disappointment over interest rates presumably trumped any lingering optimism over a stimulus package boost.
Industrial and Commercial Bank of China (601398.SH) fell a bit more than 5% this week, and is down 28.43% from June 18. The fund is down 41% since June 3, while the SCI is down about 46%.