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Shanghai shares drop amid concerns of tightening

SHANGHAI'S key stock barometer dropped below 3,000 points in the morning session, amid concerns there will be tightening measures in the near future to curb inflationary risks.

The benchmark Shanghai Composite Index lost 1.16 percent, or 34.91 points, to close at 2,978.51 points. Turnover was 40.9 billion yuan(US$6.0 billion). Losers outnumbered gainers 672 to 193, and 53 remained unchanged.

The Shenzhen Composite Index, which tracks the smaller domestic market, dropped 1.16 percent to close at 1,134.16 points.

Premier Wen Jiabao told a press conference in Beijing yesterday that the government should strike a balance between maintaining economic growth, adjusting economic development model and managing inflation expectation this year.

Central bank governor Zhou Xiaochuan said at a separate new conference that the current price level is higher than the expectation of the central bank and an interest rate rise will depend on the outlook of the price changes.

Industrial & Commercial Bank of China, the nation's biggest lender, was down 0.82 percent to 4.82 yuan. Shanghai Pudong Development Bank dropped 1.19 percent to 20.79 yuan. China Construction Bank lost 1.43 percent to close at 5.53 yuan.

China Merchants Bank said it sold 2 billion A shares in a rights offer at 8.85 yuan each and raised 17.76 billion yuan. The stock lost 1.18 percent to 15.10 yuan.

Property shares showed mixed results. China Vanke Co, the biggest listed domestic real estate developer, was down 0.96 percent to 9.27 yuan. Gemdale Corporation was up 0.98 percent to 13.34 yuan. Poly Real Estate Group edged up 0.15 percent to 19.48 yuan.

China Shenhua Energy Co said profit climbed 19 percent to 31.7 billion yuan but missed the 33.1-billion yuan average estimate by analysts. Its shares dropped 2.02 percent to 28.19 yuan.

Metal producers also closed lower after gold dropped 2.48 percent in the previous week amid weak consumer confidence. Shandong Gold Mining Co lost 0.97 percent to 68.10 yuan. Yunnan Copper Co fell 2.62 percent to 24.86 yuan. Jiangxi Copper Co was down 1.98 percent to 34.18 yuan.


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