China shares decline 1.12%, benchmark index drops below 2,000

(Xinhua)
Updated: 2008-10-15 19:44

BEIJING - Chinese shares in the Shanghai bourse lost 1.12 percent on Wednesday, as investor confidence remained weak.

Influenced by the drop in the US stock market, the benchmark Shanghai Composite Index went down 22.65 points to end at 1,994.67. The Shenzhen Component Index closed at 6,406.35 points, down 1.03 percent.

Aggregate turnover dropped to 42.37 billion yuan (US$6.23 billion) from the previous day's 76.8 billion yuan.

More than half of China's heavyweight stocks fell because of weak investor confidence. China Life dropped 4.84 percent to 20.06 yuan and China Shenhua Energy Company lost 3.21 percent ending at 19.93 yuan.

As international coal prices dropped and coal exports slowed down, Coal and oil shares fell 2.88 percent, which pulled down the market. Hebei Jinniu Energy resources Co. plunged by the daily limit of 10 percent to 12.95 yuan and Shanxi Guoyang New Energy Co. slipped 5.22 percent to 8.9 yuan. Sinopec was down 6.48 percent to 9.09 yuan.

Agricultural and nonferrous metal shares also slid 2.48 percent and 2.08 percent respectively.

Analysts said there would be repeated corrections around or below the 2,000 point mark, as investors wait for possible government action to stabilize the domestic stock market.

Medical stocks bucked the trend after the draft on medical reform was released. It contained measures that would expand the medicine market and support technological innovation in the field.

Jilin Zixin Pharmaceutical Industrial Co. surged by the daily limit of 10 percent to 8.83 yuan. Zhejiang Medicine Co. gained 3.83 percent to 11.93 yuan.

Stimulated by local governments' measures to boost the real-estate market, property and bank shares were strong in the afternoon, but failed to boost the market. COFCO Property Group gained 9.78 percent to 5.05 yuan, and Vanke rose 3.39 percent to 6.71 yuan. Shanghai Pudong Development Bank Co. was up 4.43 percent to 13.92 yuan.