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Key index dips as US market declines

SHANGHAI'S key stock index ended slightly lower yesterday after markets in the United States tumbled overnight, sending the barometer to a 1.8 percent drop this week.

The Shanghai Composite Index dipped 0.5 percent, or 13.02 points, to close at 2,597.6, after hitting an intraday low of 2,578.59 points. Turnover shrank sharply to 99.12 billion yuan (US$14.57 billion) from 138.84 billion yuan on Thursday.

"Heavyweights exerted pressure on the index and dragged the market down despite comparatively strong performance by mid and small stocks," said Wu Ling, an analyst with S&E Securities Brokerage Co.

The Dow Jones Industrial Average sank 1.53 percent, or 129.27 points, to 8,292.77 at the market close on Thursday.

Wu expected the correction in the local bourse to continue as investors were also worried over the supply of new stocks and the pending launch of a new capital market on the Chinese mainland.

"Investors are concerned over the resumption of initial public offerings and the launch of a Nasdaq-like growth enterprise market, which may divert capital from the market," Wu said. "So the correction will continue in the short term."

PetroChina fell and led the market down after oil prices slid 1.6 percent overnight. PetroChina, the country's largest oil firm and the biggest index member, shed 2.35 percent to 12.86 yuan.

China Shenhua Energy Co, Asia's largest coal miner, lost 2.06 percent to 26.09 yuan.


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