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Shanghai index falls at midday
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Shanghai's key stock index fell this morning. Yunnan Copper Industry Co and Zhongjin Gold Co led mining companies lower after prices of the metals declined.

The Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B shares, lost 0.43 percent, or 18.15 points, to 4,174.38.

The index plunged 4.07 percent to a seven-month low yesterday.

Losers in the Shanghai market outnumbered gainers 640 to 187 while 25 were unchanged.

The Shenzhen Composite Index, which covers the mainland's smaller stock market, declined 1.7 percent, or 22.58 points, to 1,308.65.

Yunnan Copper Industry Co tumbled 8.55 percent, or 4.48 yuan (63 US cents), to 47.90 yuan while Zhongjin Gold, the nation's biggest producer of the metal, lost 6.44 percent, or 6.78 yuan, to 98.53 yuan.

Gold futures fell sharply after the dollar gained a little muscle against the euro. Gold for April delivery shed US$7.30 to settle at US$940.50 an ounce on the New York Mercantile Exchange yesterday while March copper declined 5 US cents to settle at US$3.7395 a pound.

China Unicom, which controls the nation's second-largest cell phone operator, continued to fall in the early session today. It lost 5.77 percent, or 0.63 yuan, to finish the session at 10.29 yuan. The stock dived 9.98 percent yesterday.

China plans to reorganize its telecommunications industry to form three business groups through the breakup of mobile-phone operator China Unicom.

China Unicom's smaller code division multiple access network, or CDMA, will be sold to fixed-line operator China Telecom Corp, while its larger global system for mobile communications service will be acquired by China Netcom Group Corp.

Shanghai Pudong Development Bank Co, China Merchants Bank Co and Ping An Insurance (Group) Co all gained after the nation's top securities regulator said it will closely examine proposed equity sale plans.

Pudong Bank, partly-owned by Citigroup Inc, rose for the first time in five days on expectations that the bank may delay or cut a one billion share sale to the public. It added 3.28 percent, or 1.28 yuan, to finish the session at 40.28 yuan.

China Merchants, the nation's largest dual-currency credit card issuer, had dropped to an almost seven-month low on concern the end of a two-year share lock-up this week will spark a sell-off by institutional investors. But it jumped 1.41 percent, or 0.42 yuan, to 30.20 yuan this morning.

Ping An Insurance, China's second-largest insurer, gained 3.24 percent, or 2.12 yuan, to 67.50 yuan.

On January 18, the insurer announced plans to issue a maximum of 1.2 billion new shares to replenish capital after it invested 1.81 billion euros (US$2.7 billion) in Belgium's Fortis. Its Shanghai-traded stock has plunged 34 percent since the announcement.

China's securities regulator said yesterday it will "strictly" examine applications from listed companies seeking to sell additional shares after investor concerns about rising supply triggered recent selloffs.

Companies should "prudently'' consider the amount, timing and affordability of offerings before deciding on secondary fundraisings, the regulator said.

(Shanghai Daily, February 26, 2008)

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