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China shares close lower amid weak market confidence - Tue

Updated: 2010-02-02 16:11
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Chinese equities continued the downward trend of the previous two trading days and closed lower Tuesday, led by property and agricultural large-cap shares, as investor confidence remained weak, dealers said.

The benchmark Shanghai Composite Index lost 0.23 percent, or 6.65 points, to close at 2,934.71 points.

The Shenzhen Component Index edged down 0.64 percent, or 76.18 points, to close at 11,912.93 points.

Losers outnumbered gainers by 540 to 322 in Shanghai and 540 to 293 in Shenzhen.

Combined turnover shrank to 160.51 billion yuan ($23.51 billion) Tuesday from 176.59 billion yuan on the previous trading day.

"This shows investors' weak confidence after the Shanghai Composite Index fell below the psychologically important 3,000-point level last Wednesday," Zhang Yunpeng, an analyst with Beijing-based Huarong Securities, told Xinhua Tuesday.

Real estate shares fell across the board on investors' unease over possible credit tightening policies, Zhang said.

Shares in Beijing Dalong Weiye Real Estate Development tumbled by the daily limit of 10 percent Tuesday to 15.4 yuan per share after Beijing Municipal Bureau of Land and Resources revoked its right to buy a piece of residential land Monday, as the Shanghai-listed developer failed to pay the amount bid at auction and to sign two related documents by an agreed deadline.

China Vanke, the country's largest listed developer, fell 1.38 percent to 9.28 yuan, while China Merchants Property Development Co fell 1.97 percent to 22.93 yuan.

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Metal shares advanced the index on commodity price gains buoyed by encouraging US manufacturing figures. Aluminum Corp of China Limited (CHALCO), the country's top aluminum producer, gained 1.4 percent to 12.34 yuan, while Yunnan Copper Co, Ltd. added 1.21 percent to 24.19 yuan.

China Eastern Airlines dropped 5.07 percent to 5.99 yuan as its new tradable shares began trading at the Shanghai Stock Exchange Tuesday after its share swap with Shanghai Airlines.

China Eastern Airlines has completed the A-share swap for its merger with Shanghai Airlines, according to its Friday announcement. According to the merger plan, China Eastern swapped 1.3 of its Shanghai-listed A-shares for every Shanghai Airlines share.

Shanghai Airlines was suspended from trading Tuesday.