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Commodities and shipping flatten market

SHANGHAI'S key stock index fell in the morning session, as commodity producers declined after oil and metal prices fell and shipping lines retreated on concerns the global recession is deepening.

The Shanghai Composite Index dropped 1.37 percent, or 30.49 points, to 2,190.59 points.

The Shenzhen Composite Index, which tracks the smaller domestic market, was down 1.1 percent, or 7.88 points, to 711.12 points.

PetroChina Co lost 1.81 percent to 10.84 yuan and Jiangxi Copper Co slid 1.04 percent to 13.84 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 on media reports that 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 2.09 percent.

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 0.86 percent to 4.62 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 gained eased 1.91 percent to 3.59 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 dipped 0.96 percent to 6.16 yuan.

China Minsheng Banking Corp, the country's first privately owned bank, dropped 1.6 percent to 4.91 yuan after saying it may raise its stake in UCBH Holdings Inc.

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

Rizhao Port Co declined 2.24 percent to 5.24 yuan after saying it planned to sell 1.25 billion yuan of shares in a private placement.


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