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Shares fall for second straight day

(Xinhua)
Updated: 2008-09-02 19:19

BEIJING - Chinese equities edged down 0.87 percent on Tuesday, falling for the second consecutive day, driven by financial shares, amid concerns that the central bank would stick to tightening policy to stem inflation.

The Shanghai Composite Index was down 20.24 points, or 0.87 percent, to 2,304.89. In Shenzhen, the market shed 1.39 percent, or 106.88 points, to close at 7,578.36.

Related readings:  Chinese shares fall on corporate profit concerns  Shares rise as global slowdown fears ease  Chinese shares end week higher  Shares rebound 2% amid cautious buying

Aggregate turnover hit a 21-month low of 38.9 billion yuan (US$5.7 billion), further shrinking from 43.3 billion yuan on the previous trading day.

Gains outnumbered losses by 525-326 in Shanghai and 491-225 in Shenzhen.

The key Shanghai index has tumbled more than 56 percent this year and more than 62 percent from its peak in October. Investor confidence had been badly hurt as the market remained in downturn for too long, said Li Feng, senior analyst with the Galaxy Securities.

Banking shares continued downward movements as analysts said the government was likely to maintain tightening monetary policies after Hu Xiaolian, deputy governor of the central bank, noted on Monday that inflation was still the country's primary problem.

The Industrial and Commercial Bank of China, the country's largest lender, was down 2.09 percent to 4.69 yuan. China Merchants Bank sank 3.15 percent to 20.88 yuan while Bank of Communications declined 1.23 percent to 7.2 yuan.

Airline shares gained, boosted by a sharp retreat in world crude oil prices, which dropped US$5.55 overnight to US$111.22 per barrel on New York Mercantile Exchange.

China Airlines added 2.04 percent to 5.51 yuan, China Eastern Airlines was up 1.35 percent to 4.49 yuan and China Southern Airlines rose 2.62 percent to 3.53 yuan.

The price decrease failed to lift up oil company shares, however, with PetroChina, the country's biggest oil company, decreasing 1.65 percent to 12.51 yuan while Sinopec, Asia's top oil refiner, edging down 0.2 percent to 9.94 yuan.

Coal producers lowered in response to lower oil prices as investors worried this would cut demand for the alternative fuel. China Shenhua, the country's top coal producer, declined 2.75 percent to 26.84 yuan while shares of Yanzhou Coal Mining Company lost 1.91 percent to 13.88 yuan.