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Chinese shares close 3% lower on dampened sentiment

(Xinhua)
Updated: 2008-03-31 18:12

BEIJING - Chinese shares slumped 3 percent on Monday after securities regulators failed investors' expectation that they might introduce stimulus measures.

The benchmark Shanghai Composite Index shed 107.43 points from the previous close to 3,472.71. The Shenzhen Component Index fell 390.71 points, or 2.85 percent to 13,302.14.

The major stock index rebounded by 4.94 percent last Friday on market talk that the securities watchdog might announce a stamp duty cut or unveil the timetable for the launch of stock index futures over the weekend to stem further declines.

Investors were disappointed to find no such moves taken at the weekend, which made worries on the market worse, said analysts.

Reports on Sunday said the China Securities Regulatory Commission had urged fund companies to stay cool amidst market changes and stick to long-term investment to help maintain stability of the capital market.

The Chinese government will make efforts to promote stable and sound development of its stock market, said Chinese Premier Wen Jiabao when visiting Laos on Sunday.

Losers outnumbered winners on Monday by 726 to 65 in Shanghai and by 570 to 49 in Shenzhen. Aggregate turnover shrank sharply to 97.4 billion yuan from 130.88 billion yuan last Friday.

Large caps led the downward movement, with PetroChina, the biggest index component, falling 3.64 percent to 17.22 yuan. China Life lost 3.71 percent and China Shenhua Energy reduced 5.99 percent.

Oil, coal, airline and banking sectors rose, with Sinopec gaining 1.34 percent and Air China climbing 0.18 percent. The Industrial and Commercial Bank of China, the country's largest lender, went up 1.32 percent to 6.13 yuan.