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Commodities and shipping depress market

SHANGHAI'S key stock index ended the week down over one percent today, as commodity producers declined after oil and metal prices fell and shipping lines retreated on concern the global recession is deepening.

The Shanghai Composite Index dropped 1.26 percent, or 28.07 points, to 2,193.01 points.

Losers outnumered gainers 543 to 316 while 21 remained unchanged in the local bourse. Turnover shrank to 105.5 billion yuan (US$15.51 billion), compared with 127.9 billion yuan the previous trading day.

The Shenzhen Composite Index, which tracks the smaller domestic market, was down 0.56 percent, or 4 points, to 715 points.

PetroChina Co lost 1.9 percent to 10.83 yuan. Oil dropped 3.9 percent to US$43.87 in New York yesterday, while copper declined 2.4 percent to US$1.6535 a pound. Commodity prices rallied earlier in the week on speculation additional stimulus spending in China would boost demand for metals.

Collapsing exports have dragged China, the world's third-largest economy, to its weakest growth rate in seven years.

Shipping lines fell after media reports said China's exports may have fallen 20 percent in February from a year earlier. Imports may also have fallen 20 percent last month while China's trade surplus for February may be US$7 billion, the report said.

China Cosco Holdings Co, the world's largest dry-bulk shipping company, retreated 2 percent to 10.31 yuan.

Elsewhere, Air China Ltd, the nation's largest international carrier denied a media report it had applied to the government for a cash injection of at least 3 billion yuan. Air China inched down 1.07 percent to 4.61 yuan.

Bank of China Ltd plans to sell up to 120 billion yuan of subordinated notes to boost its capital. The debt will have at least five-year maturities, it said. Bank of China eased 2.19 percent to 3.58 yuan.

Bright Dairy & Food Co, the dairy producer, said it plans to sell its 51 percent stake in a milk unit in Jiangxi province for 20 million yuan. The unit is unprofitable, it said. Bright Dairy added 0.64 percent to 6.26 yuan.

China Minsheng Banking Corp, the country's first privately owned bank, dipped 2.2 percent to 4.88 yuan after saying it may raise its stake in UCBH Holdings Inc.

Gansu Jiu Steel Group Hongxing Iron & Steel Co jumped by the 10 percent daily cap to 7.54 yuan. The steelmaker said 2008 profit fell 96 percent to 24.6 million yuan.

Rizhao Port Co advanced 5.97 percent to 5.68 yuan after saying it planned to sell 1.25 billion yuan of shares in a private placement.


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