(Xinhua)
Updated: 2008-03-21 12:48

BEIJING - China's benchmark Shanghai Composite Index fell 41.70 points, or 1.10 percent, to close the morning trade at 3,762.36 on Friday.

The index rose as much as 0.9 percent at one point before declining on profit taking in the wake of two-day rally. It gained 1.13 percent on Thursday and 2.53 percent on Wednesday.

Analysts said investors confidence was recovering, but they still remained cautious after recent heavy sell-offs.

PetroChina, which accounts for one quarter of the key Shanghai index, continued to lead the decline. It tumbled 4.25 percent to 20.97 yuan as crude oil prices fell and on disappointing news its 2007 net income rose 2.4 percent.

Financial and metals stocks also fell heavily. Huaxia Bank sank 4.83 percent to 14.00 yuan and Shenzhen Development Bank shed 3.48 percent to 27.99 yuan. Industrial and Commercial Bank of China edged down 0.89 percent to 5.59 yuan.

Non-ferrous metals stocks continued losing streak as global metals prices fell heavily this week. Yunnan Tin Co. lost 3.81 percent to 44.73 yuan and Jiangxi Copper Co. dropped 1.86 percent to 35.90 yuan. Shandong Gold Mining Co. plunged by the daily 10 percent limit to 154.67 yuan.

Gains in steel shares cushioned the decline. Guangzhou Iron and Steel surged by 10 percent to 8.56 yuan on news it was acquired by Baosteel Group. Baosteel's listed arm, Baoshan Iron and Steel, gained 2.90 percent to 14.55 yuan.

Airlines continued rally on falling crude prices. Air China rose 5.14 percent to 16.76 yuan and China Southern Airlines added 2.56 percent to 15.25 yuan.