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Shanghai index ends four-day charge

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

The benchmark Shanghai Composite Index dropped 1.13 percent, or 35.22 points, to close at 3,089.45 points, after peaking at 3,130.07 points. Turnover shrank to 181.1 billion yuan (US$26.6 billion) from 203.9 billion yuan.

Several institutions have predicted inflation and the producer price index would drop in June for the fifth consecutive month, indicating sluggish consumer demands and economic conditions.

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

Property developers lost the most ground amid concern regulators will curb mortgage lending to avoid bubbles in housing prices. Shanghai Lujiazui Finance & Trade Zone dropped 2.52 percent to 25.52 yuan. Gemdale Corp fell 3.01 percent to 17.74 yuan.

Commodity producers declined on lower metals prices. Zhongjin Gold slid 2.56 percent to 62 yuan while Shandong Gold Mining declined 2.47 percent 61.11 yuan. Gold edged down 0.7 percent to US$924.30 an ounce overnight. China Shenhua Energy Co, Asia's largest coal producer, lost 1.97 percent to 32.83 yuan.

Bucking the downward trend, Huadian Power International Co led the power sector in gains. 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 jumped 7.25 percent to 10.21 yuan.


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