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Market falls to lowest level in two months

SHANGHAI'S key stock index retreated today to the lowest point in two months with a slump in the non-ferrous sector and property shares.

The benchmark Shanghai Composite Index tumbled 4.30 percent, or 125.30 points, to close at 2,785.58 points on turnover of 122.3 billion yuan (US$17.9 billion).

Losers outnumbered gainers 799 to 78 and 33 remained unchanged. The index is now 20 percent below the year's high on August 4.

The Shenzhen Composite Index, which tracks the smaller domestic market, slid 4.86 percent to close at 921.32 points.

"Non-ferrous metal producers have been gaining on continuing anticipation of inflation which does not reflect the actual pace of economic recovery," GF Securities said in a research note.

"The market will remain weak and investors should not be too quick to enter it," the company said.

Steel and metal producers were among the losers as investors took profit from earlier gains. Baoshan Iron & Steel Co slid 7.18 percent to 7.11 yuan and Maanshan Steel retreated 7.50 percent to 4.81 yuan. Angang Steel Co Ltd dropped 6.23 percent to 13.25 yuan.

Aluminum Corporation of China Ltd, the nation's biggest producer of the metal, slid 7.47 percent to 14.49 yuan while Shandong Gold Mining Co lost 4.04 percent to 48.72 yuan. Yunnan Copper Co retreated 8.70 percent to 28.76 yuan.

Property developers were also weak after Mayor Han Zheng said Shanghai would provide another 1,200 hectares of land for new residential projects, taking the year's supply to 1,600 hectares which is more than double last year's 700 hectares.

China Vanke Co, the largest listed property developer, dropped 5.58 percent to 11.00 yuan and Gemdale Corporation slid 8.17 percent to 14.39 yuan.
Poly Real Estate Group was down 5.56 percent to 23.76 and Shanghai Shimao Co Ltd tumbled 7.38 percent to 13.56 yuan.

China's Ministry of Health yesterday issued a list of 307 essential drugs that will be available at a lower price as part of the medical system reform.

Pharmaceutical companies were among the gainers as a result. Guilin Layn Natural Ingredients Corp advanced 3.54 percent to 37.40 yuan and Yunnan Baiyao Group Co jumped 5.36 percent to 39.70 yuan.

Zhuzhou Qianjin Pharmaceutical Co hiked 8.33 percent to 18.85 yuan and Tibet Rhodiola Pharmaceutical Holding Co rose 1.43 percent to 9.21 yuan.

China Minsheng Banking said its first half profit rose 22 percent year-on-year to reach 7.4 billion yuan as a result of increasing demand for loans and investment gains. Its shares dropped 3.61 percent to 6.95 yuan.


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