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Key index ends week on low note after a four-day decline

SHANGHAI'S key stock index remained weak yesterday and closed lower for the fourth trading day to below 2,100 points, making it the worst performing week this year.

The Shanghai Composite Index lost 1.81 percent to close at 2,082.85 points. Turnover shrank to 98.1 billion yuan (US$14.34 billion) from Thursday's 127.4 billion yuan.

The index buckled 7.9 percent this week, the biggest weekly drop since December 26 when the benchmark lost 8.3 percent.

"The index is likely to remain weak as people are waiting to see specific results of those industry specific stimulus packages," according to a research note by United Securities.

Both China Eastern Airlines Corp and China Southern Airlines Co slid by the daily limit of 10 percent.

China Eastern will cancel some orders for Airbus SAS and Boeing Co aircraft and pay compensation as it slashes growth plans. China Southern said that it would raise 3 billion yuan from its parent company to pay bank loans. Air China Ltd lost 8.45 percent to 4.44 yuan.

Agricultural companies also suffered losses. Xinjiang Sayram Modern Agriculture Co and Hunan Dongting Aquaculture Co both dropped by 10 percent. Xinjiang Sayram closed at 8.63 yuan and Hunan Dongting ended at 4.01 yuan.

Maanshan Iron & Steel Co, China's fourth-largest listed steel maker, said that 2008 profit probably fell 71 percent because of higher raw material and fuel costs and shrinking value of inventories. The shares lowered 4.26 percent to 3.60 yuan.

Banks reversed yesterday's losses as Liu Mingkang, president of the China Banking Regulatory Commission, noted that net profit in 2008 for financial institutions surged 30 percent from the previous year and said that banks would outperform the market in 2009. Industrial & Commercial Bank of China added 1.63 percent to 3.73 yuan. Shanghai Pudong Development advanced 3.31 percent to 17.78 yuan.


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