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Market drop 6%

SHANGHAI'S key stock index tumbled nearly 6 percent to post the biggest daily loss since November 18, led by commodity producers and heavyweights over uncertainty about the macroeconomic situation and fears of lack of liquidity in the future.

The benchmark Shanghai Composite Index lost 5.79 percent, or 176.34 points, to close at 2,870.63 points. Turnover was 137.5 billion yuan (US$20.1 billion), compared with an average of 143.6 billion yuan in the previous week. Losers outnumbered gainers 846 to 24 and 40 remained unchanged.

The Shanghai Composite Index has lost a collective of 17.1 percent since August 4, when the index peaked.

The Shenzhen Composite Index, which tracks the smaller domestic market, lost 6.56 percent to close at 955.87 points.

A total of 14.9 billion yuan of public funds and 664 million yuan of pension funds were withdrawn from the Shenzhen Stock Exchange in July, the biggest monthly outflow this year, the country's smaller bourse said in a statement today.

Oil prices dropped 4.3 percent on the New York Mercantile Exchange to a three-week low of US$67.12 per barrel with US consumer sentiment falling in August, darkening the outlook of economic recovery.

PetroChina, the country's largest oil producer and biggest heavyweight in the market, dropped 6.10 percent to 13.09 yuan. China Petroleum & Chemical Corp, Asia's largest refiner and also known as Sinopec, fell 5.80 percent to 12.18 yuan.

Domestic banks extended 356 billion yuan of new loans in July, the lowest level in 9 months among concerns of asset bubbles forming.

It is widely recognized that the record high credit in the first half will not continue in the rest of the year and more IPOs and the pending launch of Growth Enterprise Market will also divert capital out of the market.

China Everbright Securities Co said its shares will begin trading in Shanghai tomorrow, according to a filing to the city's stock exchange. The Shanghai-based brokerage will sell 5.2 billion shares in its initial public offering, with an initial price of 21.08 yuan per share.

Yunnan Copper Industry Co reported a net loss of 126 million yuan in the first half, with decreasing demand and rising raw material price. Its shares were down 10 percent to 29.84 yuan.

Both Jiangxi Copper Co and Shandong Gold Mining Co also dropped 10 percent. Jiangxi Copper closed at 37.37 yuan and Shandong Gold ended at 47.97 yuan.

Ping An Insurance (Group) Co said its first-half profit was 5.22 billion yuan, down 45 percent from the 9.49 billion yuan in the same period last year. Its shares lost 3.91 percent to 50.56 yuan. CITIC securities tumbled 4.64 percent to 31.05 yuan after it said net profit decreased 19.8 percent to 3.82 billion yuan in the first half.


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