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Key index tumbles almost 4%

SHANGHAI'S key stock index tumbled nearly 4 percent yesterday, its biggest daily drop in six weeks, amid profit taking as surrounding markets also declined and on growing concerns over disappointing macro-economic figures for the first quarter.

The Shanghai Composite Index lost 3.76 percent, the most since February 26, to close at 2,347.39 points. Turnover rose to 135.64 billion yuan (US$19.95 billion) from 116.79 billion yuan on Tuesday.

"Investors got a bit pessimistic as more than 70 percent of listed companies booked a loss or reduced profits for the first quarter," Shenyin and Wanguo Securities Co wrote in a note. "And overseas markets also tumbled on the generally gloomy economic outlook."

The market "still needs a further correction as the key index has climbed too much without solid fundamentals," Wan Bing, an analyst at GF Securities Co, cautioned.

Shares of real estate developers plunged after property broker E-House (China) Holding Ltd said housing prices will be stagnant through next year. Gemdale Corp lost 6.98 percent to 10.4 yuan. Poly Real Estate Group Co was off 4.57 percent to 21.51 yuan despite first-quarter sales almost tripling from the same period last year to 6.48 billion yuan. Shanghai-based Shimao Co dived 7.3 percent to 9.91 yuan.

Heavyweight blue chips were also decliners. China Petroleum & Chemical Corp slumped 4.15 percent to 8.78 yuan. PetroChina sank 3.77 percent to 11.22 yuan.

Financial shares also fell. China Merchants Bank shed 5.65 percent to 15.69 yuan and the Bank of China lost 3.91 percent to 3.44 yuan.


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