China shares fall on reaffirmed property curbs

Updated: 2010-07-13 16:15
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SHANGHAI - Chinese shares fell Tuesday, led by real estate after the government said it has no plans to ease curbs on development.

The benchmark Shanghai Composite Index lost 40.43 points, or 1.62 percent, to close at 2,450.29. The Shenzhen Composite Index declined by 1.58 percent to 9,801.76.

A two-day rally fizzled after Beijing ordered banks to strictly enforce tight mortgage rules imposed to cool speculation and surging housing prices. It was responding to market rumors that curbs might be eased to spur the slowing industry after housing prices declined 0.1 percent from May to June. [Tightening property policies to continue]

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China Vanke Ltd, China's biggest developer, shed 2.4 percent to 7.46 yuan ($1.10), while rival Poly Real Estate Group lost 4.3 percent to 11.33 yuan.

Bank of China Ltd and China Construction Bank Ltd both declined 1.7 percent -- BOC to 3.51 yuan and CCB to 4.76 yuan. Industrial & Commercial Bank of China Ltd, China's biggest commercial lender, slipped 1.2 percent to 4.25 yuan.

Concern about real estate also hit metals and construction shares on fears of weaker demand.

Jiangxi Copper Ltd, China's biggest metal producers, fell 3.1 percent to 24.51 yuan, while Aluminum Corp of China dropped 2.2 percent to 8.9 yuan.

Fujian Cement Inc declined by 3.7 percent to 6.6 yuan and China State Construction Engineering Corp shed 2.1 percent to 3.65 yuan.

In currency markets, the yuan weakened to 6.7779 to the US dollar from Monday's close of 6.7715.