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Profits and concerns cloud market

SHANGHAI'S key stock index dropped today for the first time in five trading days, as investors took profits and expressed concerns over negative economic data for the last month.

The benchmark Shanghai Composite Index was down 1.13 percent, or 35.22 points, to close at 3,089.45 points, after hitting a high of 3,130.07 points. Turnover shrank to 181.05 billion yuan (US$26.63 billion) from 203.9 billion yuan. Losers outnumbered gainers 447 to 394 and 28 remained unchanged.

The Shenzhen Composite Index, which tracks the smaller domestic market, dipped 0.24 percent to close at 1,008.2 points.

Several institutions have predicted that inflation and the producer price index are expected to drop further in June, the fifth consecutive month for both, indicating sluggish consumer demand and economic conditions.

"The market is in faced with mounting pressure amid profit taking these days. We do not see much room for further rallies in short term as there is a technical need for a correction," Nanjing Securities Co wrote in a research note.

Property developers led the losers on concern regulators will curb mortgage lending to avoid bubbles in housing prices. Shanghai Lujiazui Finance & Trade Zone tumbled 2.52 percent to 25.52 yuan. Poly Real Estate Group Co plunged 3.2 percent to 28.7 yuan. Gemdale Corp inched down 3.01 percent to 17.74 yuan.

Commodity producers declined on lower metal prices. Zhongjin Gold slid 2.56 percent to 62 yuan while Shandong Gold Mining declined 2.47 percent 61.11 yuan.
Gold fell 0.7 percent to US$924.30 an ounce overnight.

Bucking the down trend, Huadian Power International Co led the power sector up. Huadian jumped by the 10 percent daily cap to 5.83 yuan after a unit bought stakes in two coal companies. Chongqing Jiulong Electric Power Co hiked 7.25 percent to 10.21 yuan and Shanghai Electric Power Co expanded 7.48 percent to 5.75 yuan.


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