Chinese shares drop 1.11% on banks, property developers

Updated: 2010-04-22 20:52
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BEIJING - Chinese equities slid more than 1 percent Thursday, dragged down by banks and property developers.

The benchmark Shanghai Composite Index on the Shanghai Stock Exchange ended at 2,999.48 points, down 33.8 points, or 1.11 percent.

The Shenzhen Component Index dropped 0.53 percent, or 62.86 points, to close at 11,703.96 points.

Total turnover expanded to 279.83 billion yuan (US$40.97 billion) from 271.39 billion yuan the previous trading day.

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Losers outnumbered gainers by 485 to 376 in Shanghai, while gainers outnumbered losers by 497 to 385 in Shenzhen.

Concerns about the real estate market and a tightening in credit weighed after media reports said China's banking regulator has adopted stricter rules for the identification of a "second home" in assessing home loan applications.

Yang Jiacai, an official with the China Banking Regulatory Commission, told reporters Wednesday whether a house is a "second home" should be judged by property ownership at the family level and not the individual level.

Previously, the assessment was made based on the family's mortgage history or whether the family has an outstanding home loan.

China raised the down payment for second-home buyers to a minimum 50 percent of the purchase price from 40 percent last week in a bid to curb property market speculation.

Banks and property developers both fell, dragging the index below the psychologically important 3,000-point level.

Real estate stocks slumped 1.43 percent, with China Vanke Co., the country's largest property developer by market value, falling 2.59 percent to a year low of 7.9 yuan.

The financial sector slipped 2.18 percent as a report from China International Capital Corporation revealed new loans extended in the first three weeks of April amounted to a lower-than-market-expectations 140 billion yuan.

Bank of Communications, China's fifth largest bank by market value, dived 4.93 percent to 7.33 yuan while China Construction Bank, China's second largest bank, fell 2.99 percent to 5.19 yuan.