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Key stock index dips before holiday

SHANGHAI'S key stock index closed lower yesterday on the last trading day of the month amid concerns that a weakening economy will erode corporate profits.

The Shanghai Composite Index dipped 0.71 percent, or 14.29 points, to close at 1,990.66 points. Losers outnumbered gainers 582 to 289 with 17 stocks unchanged. Turnover fell to 62.93 billion yuan (US$9.25 billion) from 66.5 billion yuan on Thursday.

The index has gained a total of 7.58 percent in the first month of this year, the biggest monthly gain in 17 months. The market will be closed for the Lunar New Year holiday and will reopen on February 2.

The earnings of domestically-listed companies will probably shrink 14 percent this year, compared with an earlier estimate of a 0.5-percent gain, UBS AG said.

Among decliners, Guangzhou Iron & Steel Co said that it incurred a loss in 2008 because prices fell and the value of raw-material inventories dropped. Rival Gansu Jiu Steel Group also said that profit plunged more than 50 percent last year. Baosteel, China's biggest mill, has said that it is facing its "most difficult" period since its founding 30 years ago.

Guangzhou Steel fell 1.78 percent to 3.86 yuan while Gansu Jiu Steel dropped 1.58 percent to finish at 5.59 yuan. Aluminum Corp of China lost 2.11 percent to 6.96 yuan after saying net income probably fell more than 50 percent last year on lower product prices and shrinking demand.


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