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Key stock index drops on weak earnings in Q1

SHANGHAI'S key stock index dropped nearly 1 percent yesterday as first-quarter corporate earnings were generally weak, placing pressure on the barometer, a brokerage said.

The Shanghai Composite Index fell 0.85 percent, or 21.63 points, to close at 2,535.83. Turnover rose to 154.9 billion yuan (US$22.78 billion) from 140.5 billion yuan on Monday.

"The first-quarter earnings reports posed a great pressure on the local benchmark index," Guosen Securities Co wrote in a note. "But the index is likely to rebound due to abundant liquidity and hopes of an economic rebound."

Commodity producers led the decline as prices plunged on fears the global recession would continue to dent demand. Yunnan Copper Industry Co, China's third-biggest producer of the metal, tumbled 2.39 percent to 20.40 yuan after booking a loss in the first quarter on lower output as copper prices slid the most in two months.

Western Mining Co lost 2.31 percent to 15.24 yuan after saying first-quarter profit plunged 84 percent due to lower prices of metals. Tongling Nonferrous Metals Group Co tumbled 3.68 percent to 14.92 yuan and Jiangxi Copper Co lost 3.54 percent to 14.92 yuan.

Lenders also fell, with Hua Xia Bank Co losing 4.37 percent to 10.5 yuan. The Bank of Communications dived 2.45 percent to 6.78 yuan, and China Construction Bank Corp shed 1.32 percent to 4.47 yuan.

Gold producers gained as investors sought bullion for its safe haven status. Zijin Mining Group Co, the largest gold miner, rose 1.36 percent to 10.43 yuan. Zhongjin Gold Co increased 2.59 percent to close at 57.45 yuan.


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