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Market suffers fourth successive weekly fall

SHANGHAI'S key stock index plunged nearly 3 percent today, sending the barometer to its fourth weekly decline, as the market faces mounting pressure from a capital shortage with more large initial public offerings and large-scale financing of listed companies.

The benchmark Shanghai Composite Index tumbled 2.91 percent, or 85.71 points, to close at 2,860.69 points. Turnover shrank to 133.76 billion yuan (US$19.67 billion) from 145.25 billion yuan yesterday. Losers outnumbered gainers 746 to 117 and 8 remained unchanged.

The Shenzhen Composite Index, which tracks the smaller domestic market, lost 3.07 percent to close at 974.29 points.

A subsidiary of China Metallurgical Group Corp announced it received regulatory approval to raise as much as 16.8 billion yuan in its IPO on the Shanghai bourse.

Meanwhile, China Vanke Co, the nation's largest publicly listed real estate developer said it plans to raise up to 11.2 billion yuan through private placement.

Analysts said a string of these financing plans in the second half could dilute market capital and drag down stock prices.

Steel producers led the losers. Baoshan Iron & Steel Co tumbled 3.77 percent to 6.9 yuan. Wuhan Iron and Steel Co was down 6.42 percent to 8.02 yuan. Handan Iron & Steel Co withdrew 4.94 percent to 5.39 yuan. Anyang Iron & Steel Inc retreated 5.49 percent to 5.51 yuan.

Lenders had sluggish performance. Bank of China dropped 1.76 percent to 3.9 yuan after saying it plans to slow credit growth in the second half. Industrial & Commercial Bank of China, the nation's biggest lender, retreated 1.49 percent to 4.63 yuan. Shanghai Pudong Development Bank slid 5.75 percent to 19 yuan. China Merchants Bank Co was off 3.39 percent to 14.54 yuan.


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