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Shanghai shares sag due to weak financial sector

SHANGHAI'S key stock index ended lower today due to a weak performance in the financial sector.

The Shanghai Composite Index was down 0.46 percent, or 9.09 points, to 1,985.02 points. Turnover was 68.0 billion yuan (US$9.94 billion), up from yesterday's 55.5 billion yuan. Losing shares outnumbered gainers 526 to 317 and 65 remained unchanged.

The Shenzhen Composite Index, which tracks the smaller domestic market, decreased 0.37 percent, or 2.24 points, to 604.57 points.

"China cannot avoid the turmoil brought by the global economic downturn but that doesn't mean investors have no chance. We suggest investors focus on companies with long-term earnings ability, especially those with capital injections from the government," Huatai Securities wrote in a research note.

Banks showed mixed results. Shanghai Pudong Development Bank advanced 1.05 percent to 16.37 yuan. Bank of Communications added 1.26 percent to 5.63 yuan. Bank of China dipped 0.33 percent to close at 3.05 yuan.

China Life Insurance Co Ltd, the country's largest life insurance company, was down 1.82 percent to 19.92 yuan. China Pacific Insurance (Group) Co Ltd retreated 3.68 percent to 13.88 yuan.

Angang Steel Co, the country's second-largest steel maker by market value, said its profit for 2008 fell 55 percent on rising raw material costs. Its stocks tumbled 2.94 percent to 7.91 yuan.

Datang International Power Generation Co, the unit of China's second-biggest electricity producer, said it may post an 85 percent drop in profit last year. Its shares fell 2 percent to close at 6.85 yuan.

China Shenhua Energy Co, the nation's largest coal producer, said its output of fuel increased 18 percent last year from 2007 due to increasing domestic demand. Its shares still dipped 1.02 percent to 19.39 yuan.

Sichuan Hongda Chemical Industry Co, China's third-largest zinc producer, said its net loss for 2008 will be between 500 million yuan and 590 million yuan as a massive earthquake in May disrupted production for more than four months. Its shares fell 2.90 percent to 6.03 yuan.

Suning Appliance Co, China's biggest home appliance retailer by market value, said its net income for 2008 may rise at least 40 percent from the previous year, compared with its earlier forecast of at least 60 percent. Its shares tumbled 9.10 percent to 15.88 yuan.

Real estate developers were among the gainers as speculation mounted that the government is planning more incentive measures to boost the property market. China Vanke Co, the largest domestic listed property developer, added 2.60 percent to 7.10 yuan. Gemdale Corporation jumped 5.12 percent to 7.80 yuan.


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