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Market dives below 2,500 mark

SHANGHAI'S key stock index dropped nearly 3 percent to sink below 2,500 points as energy companies and metal producers plunged.

The benchmark Shanghai Composite Index lost 2.94 percent, or 74.48 points, to close at 2,461.35 points. Turnover was 177.6 billion yuan (US$26.0 billion). Losers outnumbered gainers 779 to 85 and 44 remained unchanged.

The Shenzhen Composite Index, which tracks the smaller domestic market, buckled 4.32 percent to close at 819.14 points.

Ping An Insurance Co, China's second-largest insurer, dropped 2.83 percent to 39.83 yuan. China Pacific Insurance (Group) Co lost 2.73 percent to 17.81 yuan. China Life Insurance Co, the nation's biggest insurer, was down 2.66 percent to 23.45 yuan.

China's insurance regulator plans to start a trial program to let insurers invest in property, or in securities backed by loans and real estate investment trusts. The China Insurance Regulatory Commission will carry out research and announce when it will start the program, it said yesterday.

Banks reversed the gains of the morning session. Industrial & Commercial Bank of China Ltd, the nation's biggest bank, dipped 0.24 percent to 4.11 yuan. China Merchants Bank Co, the nation's fifth-largest bank by market value, said its board has approved a plan to sell bonds worth less than 10 percent of its total debts over three years. Its shares lost 3 percent to 15.54 yuan.
People's Bank of China Deputy Governor Yi Gang said there are signs of economic recovery in China as the government stimulus packages take effect. Lending is growing at a rapid rate, bad loans are at historical lows and the financial system is sound, Yi told bankers at a derivatives industry meeting in Beijing today.

Datang International Power Generation Co, a unit of China's second-biggest electricity producer, was down 2.77 percent to 7.37 yuan. GD Power Development Co, the largest electricity producer in northeastern China, dipped 0.95 percent to 6.24 yuan.

Anhui Hengyuan Coal Industry and Electricity Power Co Ltd buckled 8.78 percent to 18.07 yuan. Hebei Jinniu Energy Resources Co Ltd retreated 7.26 percent to 23.26 yuan. Henan Shenhuo Coal Industry and Electricity Power Co Ltd tumbled the daily limit of 10 percent to 24.92 yuan.

Zijin Mining Group Co plunged 6.04 percent to 9.80 yuan and Zhongjin Gold Corp eased 3.66 percent to 55.35 yuan after metal prices dropped.

Huaneng Power International Inc, the listed unit of China's largest power group, was down 2.95 percent to 7.89 yuan. The company said its first-quarter net income more than doubled.


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