Chinese shares fall on corporate profit concerns

(Xinhua)
Updated: 2008-09-01 19:34

BEIJING - Chinese equities fell on Monday as the hopes of investors for market- boosting measures over the weekend failed to materialize and concerns about listed companies' profitability increased.

The Shanghai Composite Index was down 72.23 points, or 3.01 percent, to 2,325.14. The key index had tumbled more than 55 percent this year.

In Shenzhen, the market shed 3.99 percent, or 319.01 points, to close at 7,685.24. Aggregate turnover shrank to 43.3 billion yuan (US$6.34 billion) from 56.7 billion yuan the previous trading day.

Losses outnumbered gains by 673-141 in Shanghai and 613-74 in Shenzhen.

"The decline is inevitable as the market is now too reliant on the authorities' market-boosting measures. Once the hope fails to materialize, the index will fall," said Tang Xiaosheng, an analyst at Guosen Securities.

Analysts said investor confidence was also discouraged by declines on Wall Street and other markets, as well as the news the profit growth of China's listed companies dropped sharply in the first half because of the economic slowdown.

Listed companies earned a combined 553.3 billion yuan in the first half of this year, up 16.04 percent compared with a year earlier growth rate of 70 percent, according to figures generated from the interim statements released by 1,619 listed companies by August 30.

Banking shares fell across the board despite big earnings in the first six months.

The Industrial and Commercial Bank of China, the country's biggest lender, was down 2.84 percent to 4.79 yuan. Bank of China shed 3.24 percent to 3.58 yuan, while Bank of Communications lost 3.65 percent to 5.28 yuan.

Oil and airline companies dropped lower as investors worried continuously rising world crude oil prices would hurt corporate earnings.

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