Lower GDP Whomps China
China's mainland indices suffered their worst one-day fall in nearly three months as China announced its GDP growth eased to 11.5% in the third quarter vs. a record 12% in the second quarter of 2007.
Beijing also announced that inflation rose by 4.1% over the same period last year, climbing 20 basis points from the January to August period.
The Shanghai Composite -- the mainland's benchmark index -- plunged 280 points, or 4.8%, on the news, to 5,562.39 points.
Investors in other Asian markets were relaxed however, with most other indices gaining. In neighboring Hong Kong, the Hang Seng rose 520 points, or 1.78%, to 29,854 points, on expectation of a potential Federal Reserve rate cut."The growth [in China] is still tremendous although very, very, high," says Peter Haimes, investment director at Aberdeen Asset Management in Singapore. "When you have over 10% growth it's insignificant unless you see a sharp slowdown, and that doesn't seem to me to be happening " The market gains in Hong Kong vs. the mainland Chinese losses continue the end of last week's trend, when dual-listed companies saw diverging performances on both exchanges. While shares in China Life Insurance (LFC) tumbled 2.45% in Shanghai, to 69.22 yuan, in Hong Kong they lost just 0.5%, to HK$51.20. Similarly, Aluminum Corp of China (ACH) plummeted 5.6% in Shanghai, to 47.10 yuan, while in Hong Kong the stock lost 2.8%, to HK$22.90.
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