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November 28, 2009

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Home » Business » Finance

Shanghai index suffer biggest weekly decline in 3 months

SHANGHAI'S key stock index extended losses yesterday to end with its biggest weekly loss in three months, as steel producers led the decline on overcapacity concerns.

The Shanghai Composite Index lost 2.36 percent, or 74.72 points, to close at 3,096.26, driving the barometer to a 6.4-percent weekly loss. Turnover shrank to 172 billion yuan (US$25.3 billion) from 254.5 billion yuan on Thursday.

The unease about Dubai World's debt problems also triggered investors' sensitive nerves, even though no Chinese institutions were known to be involved with the company, analysts said.

"Steel producers remained sluggish as previous gains were excessive and concerns on overcapacity grew," said Wen Lijun, a Nanjing Securities Co analyst.

"There were also concerns over an adjustment in the monetary policy as government officials have mentioned repeatedly the risks of asset bubbles."

Steel producers led the decline after the European Union Chamber of Commerce in China said on Wednesday overcapacity in China's steal sector amounted 100 million tons to 200 million tons at the end of 2008 and is still rising in 2009.

Baoshan Iron and Steel Co lost 6.5 percent to 7.80 yuan, Xinjiang Ba Yi Iron and Steel Co shed 5.7 percent to 13.20 yuan, and Wuhan Iron and Steel fell 5.5 percent to 7.85 yuan.

Zijin Mining Group Co, the country's largest gold producer, tumbled 7.7 percent to 10 yuan after saying billionaire Chen Fashu sold 146 million of the company's shares to cut his stake to 11.95 percent from 12.95 percent.

Zhongjin Gold Corp, the second-biggest by market value, shed 6.4 percent to 58.50 yuan, and Shandong Gold Mining Co slumped 8.2 percent to 79.02 yuan.


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