Barometer set to dip on cooling measures

SHANGHAI - China's benchmark stock index may fall a further 17 percent to 2500 in the first half as the government steps up measures to cool growth, according to Guotai Junan Securities Co, the nation's second-largest brokerage.

The Shanghai Composite Index, which has declined 9.2 percent this year, may extend losses as interest rates rise and the government increases reserves banks need to set aside for loans after consumer prices and fixed-asset investment climbed more than estimated, said Zhang Kun, a strategist at the Shanghai-based brokerage.

"There's more and more pressure on the government to do more to rein in growth," said Zhang.