Shares fall for third straight day, driven by energy producers

(Xinhua)
Updated: 2008-09-03 19:27

BEIJING - Chinese equities declined for the third consecutive day on Wednesday, led by energy producers as concerns deepened that energy prices would drop further, analysts said.

The Shanghai Composite Index was down 28.22 points, or 1.22 percent, to 2,276.67. In Shenzhen, the market shed 2.17 percent, or 164.81 points, to close at 7,413.55.

Aggregate turnover expanded to 49.1 billion yuan (US$7.2 billion) from a 21-month low of 38.9 billion yuan on the previous trading day.

Losses outnumbered gains by 470-376 in Shanghai and 362-355 in Shenzhen.

Energy and raw material producer shares were the worst performers as commodities including crude oil, gold and copper tumbled, Qilu Securities analyst said.

The crude price on New York Mercantile Exchange dropped US$5.75 overnight to US$109.71 per barrel, the lowest since April.

In response, China National Offshore Oil Corp., the country's largest offshore oil explorer, tumbled 5.22 percent to 14.33 yuan. Zijin Mining Group, the country's largest gold producer, lost 3.74 percent to 4.63 yuan.

Coal producer shares lowered as investors worried cheaper oil would cut market demand for the alternative fuel. Shanxi Xishan Coal Electricity Company declined by the daily 10 percent limit to 27.05 yuan. China Shenhua, the country's largest coal producer, slumped 5.59 percent to 25.34 yuan.

The oil price decrease lifted up oil producers and airline companies as concerns eased that higher costs would pare their earnings.

Air China rose 2 percent to 5.62 yuan, China Southern Airlines added 3.4 percent to 3.65 yuan and China Eastern Airlines was up 2 percent to 4.58 yuan. Sinopec, Asia's top oil refiner, was up 1.31 percent to 10.07 yuan.

The Industrial and Commercial Bank of China, the country's largest lender, was down 1.07 percent to 4.64 yuan and China Merchants Bank dropped 2.97 percent to 20.26 yuan.

The banking industry would face heavier pressure to boost earnings in the second half if the government maintained tightening monetary policies, Shenyin Wanguo Securities senior analyst Xu Ming said.