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Index down as commodity shares slump
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Chinese shares in the Shanghai bourse lost 1.12 percent on Wednesday with shrinking turnover, as investor confidence remained weak.

The benchmark Shanghai Composite Index went down 22.65 points to end at 1,994.67 below the 2,000-point mark. 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.

Commodity shares pulled the Shanghai market down in the morning session today after a drop in oil and metals prices fueled concern that corporate profits will decline as the world's fourth-largest economy slows.

The Shanghai Composite Index decreased 1.32 percent, or 26.72 points, to 1,990.60 points at 11:30am.

Losers outnumbered gainers 532 to 255 while 67 remained unchanged.

The Shenzhen Composite Index, which tracks the smaller domestic market, dipped 0.92 percent, or 4.86 points, to 524.76 points this morning.

Jiangxi Copper Co, China's second-biggest producer of the metal, slid after copper and zinc futures slumped by the exchange-imposed daily limit in Shanghai. China Shenhua Energy Co, the nation's largest coal producer, also fell.

Jiangxi Copper dropped 4.63 percent to 11.75 yuan (US$1.72). Shenhua dropped 2.19 percent to 20.14 yuan.

Jiangxi Copper said yesterday that its board approved the company's purchase of 40 million new shares in Nanchang City Commercial Bank for 118 million yuan.

Copper and zinc futures slumped amid skepticism the US Treasury's plan to inject US$250 billion into financial institutions won't prevent a recession.

Crude oil futures in New York fell 0.6 percent in after-hours trading, extending yesterday's 3.2 percent drop.

Maanshan Iron & Steel Co was among losing steel makers this morning. The company, China's fourth-largest listed steel maker, shed 1.44 percent to 3.43 yuan. The company said yesterday that third-quarter profit rose 56 percent from a year ago because of higher steel prices.

Huaneng Power International Inc, the listed unit of China's largest power group, lost 0.85 percent to finish the morning session at 7.02 yuan. The company said the government approved its plan to build a 5.2 billion yuan coal-fired power plant in the eastern province of Jiangsu. The 1,000-megawatt unit at Huaneng Jinling Power Plant Phase II has been approved by the National Development and Reform Commission.

On the positive side, China Citic Bank Corp’s board of directors approved a plan to allow Banco Bilbao Vizcaya Argentaria SA to double its stake in the Chinese lender's Hong Kong-listed shares to 10.07 percent. Citic Bank, the banking unit of the nation's largest investment company, jumped 3.17 percent to 4.56 yuan.

(Xinhua News Agency, Shanghai Daily October 15, 2008)


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