The Shanghai Composite Index fell 5.1% on Monday, as investors faced fears of subprime losses by Chinese banks and a US recession, the Wall Street Journal reported. The index echoed losses across Asia to post its largest drop in more than six months, closing at 4,914.44, its first sub-5,000 close this year. The sell-off came as reports suggested that Bank of China, which held the most subprime holdings of any Asian company, will write-down some or all of the US$7.95 billion it holds in subprime-related investments. The China Banking Regulatory Commission has said it will require monthly monitoring of Chinese banks’ subprime investment positions.
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