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Market closes down as airline shares flop

SHANGHAI'S key stock index remained weak today and closed lower for the fourth trading day dropping to under 2,100 points on the last trading day of February as airline companies plunged.

The benchmark Shanghai Composite Index lost 1.81 percent, or 38.40 points, to close at 2.082.85 points. Turnover shrank to 98.1 billion yuan (US$14.34 billion) from yesterday's 127.4 billion yuan. Losers outnumbered gainers 794 to 78 and 36 remained unchanged.

The Shenzhen Composite Index, which tracks the smaller domestic market, buckled 4.47 percent to close at 659.07 points.

Both China Eastern Airlines Corp and China Southern Airlines Co slid the daily limit of 10 percent. China Eastern, the nation's third-largest carrier by fleet size, said it will cancel some orders for Airbus SAS and Boeing Co aircraft and pay the planemakers compensation as it slashes growth plans. China Southern said in a statement it would raise 3 billion yuan from its parent company to pay bank loans. Air China, the nation's biggest carrier by market value, lost 8.45 percent to 4.44 yuan.

Agricultural companies also suffered losses. Xinjiang Sayram Modern Agriculture Co Ltd and Hunan Dongting Aquaculture Co Ltd both buckled the daily limit of 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 steelmaker said 2008 profit probably fell 71 percent because of higher raw material and fuel costs and the value of inventories dropped. 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 banks would outperform the market in 2009. Industrial & Commercial Bank of China, the nation's biggest lender, added 1.63 percent to 3.73 yuan. Shanghai Pudong Development advanced 3.31 percent to 17.78 yuan. China Construction Bank edged up 0.25 percent to 4.07 yuan.

The energy sector was also among the gainers. Huaneng Power International Inc, added 1.13 percent to 8.06 yuan. Huadian Power International Co Ltd, was up 1.83 percent to 5.00 yuan. China Petroleum & Chemical Corp, Asia's largest refiner, climbed 1.22 percent to 8.29e yuan.


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