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Commodities concerns darken market outlook at midday

SHANGHAI'S key stock index closed lower in the morning session, led by commodities producers, on concerns the deepening global financial crisis will further dampen demand for resources.

The Shanghai Composite Index dipped 1.26 percent, or 26.39 points, to 2,067.06 points.

The Shenzhen Composite Index, which tracks the smaller domestic market, was down 0.06 percent, or 0.43 points, to 672.42 points.

PetroChina Co, the nation's largest oil producer, slid 1.49 percent to 10.56 yuan (US$1.54). Jiangxi Copper Co plunged 3.04 percent to 15.01 yuan. Zhongjin Gold Co, China's second-largest producer of the precious metal, fell 3.34 percent to 8.4 yuan as gold retreated for a sixth day.

Crude oil slumped 10 percent to US$40.15 a barrel in New York yesterday, the biggest one-day drop since January 7. A measure of six metals traded in London declined 2.2 percent. Copper dropped 1.9 percent, nickel 4.5 percent and zinc 2.4 percent.

In the US, the Dow Jones Industrial Average sank below 7,000 for the first time since 1997, as manufacturing shrank for a 13th month while the MSCI Emerging Markets Index sank 4.9 percent yesterday to the lowest level since November 21.

China's leaders report to the nation this week on the outlook for 2009 at the annual meeting of the National People's Congress in Beijing.

Qingdao Haier Co, the air-conditioner and refrigerator unit of China's biggest appliance maker declined 1.93 percent to 9.16 yuan.

Bucking the downward trend, Beijing Sanyuan Foods Co, a dairy producer, jumped by 10 percent daily cap to 6.66 yuan, after saying shareholders had approved a plan to bid for the assets of bankrupt dairy company Sanlu Group Co.

Infant formula tainted with melamine sickened nearly 300,000 babies in China last year and was blamed for the deaths of at least four babies.

Sanlu, the company at the center of the milk scandal, filed for bankruptcy in December. The Hebei-based producer and 21 other Chinese companies were found to have sold dairy products containing melamine.

Tests by the Chinese government last year found Sanyuan's dairy products to be free of melamine, a chemical added to raw milk to make its protein content appear higher.

Xi'an Aircraft International Corp rose 10 percent to 22.2 yuan. The company said 2008 profit rose 324 percent from a year ago to 389 million yuan and sales rose 332 percent to 9.36 billion yuan.

Baoshan Iron & Steel Co, China's largest steelmaker, added 0.57 percent to 5.28 yuan after saying shareholders approved a plan to sell as much as 20 billion yuan of debt in the nation's interbank market. Baoshan Iron fell 3 percent to 5.25 yuan on February 27, when its shares last traded.


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