Shanghai- The Shanghai markets slid nearly 6 per cent on opening Wednesday after an announcement of a hike in stamp tax on stock trading. The Shanghai Composite index opened lower at 4,087.41 points, 247.51 points, or 5.78 per cent down from Tuesday's close, an all-time closing high of 4,334.92 points.
In an effort to cool down the country's runaway equity market the Ministry of Finance announced Tuesday night a rise in the stamp tax on stock trading from 0.1 per cent to 0.3 per cent starting Wednesday.
The Shanghai Composite Index has soared more than 60 per cent so far this year on top of a 130 per cent rally in 2006.
China's stock market frenzy has aroused concerns from leading economists.
Asia's richest man, Li Ka-shing, said China's stock valuations "must be a bubble" and prices are likely to decline. Central Bank governor Zhou Xiaochuan and former chairman of the US Federal Reserve, Alan Greenspan, also expressed concerns, saying the market faced a dramatic contraction.
