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Shanghai stocks slide before long holiday break

SHANGHAI'S key stock index dipped on the last trading day before the Lunar New Year amid growing concern the weakening economy will erode profits.

The Shanghai Composite Index dipped 0.71 percent, or 14.29 points, to 1990.66 points at 3pm.

Losing shares outnumbered gainers 582 to 289 and 17 remained unchanged. Turnover shrank to 62.93 billion yuan (US$9.25 billion) from yesterday's 66.5 billion yuan.

The Shenzhen Composite Index, which tracks the smaller domestic market, was down 0.47 percent, or 2.88 points, to 610.27 points.

Earnings of domestic-listed companies will likely shrink 14 percent this year, compared with an earlier estimate of 0.5 percent growth, UBS AG said.

Guangzhou Iron & Steel Co said it incurred a loss in 2008 because prices fell and the value of raw-material inventories dropped. Rival Gansu Jiu Steel Group also said profit plunged more than 50 percent last year. Baosteel, China's biggest mill, has said it is facing its "most difficult" period since its founding 30 years ago.

Guangzhou Steel fell 1.78 percent to 3.86 yuan while Gansu Jiu Steel dropped 1.58 percent to finish at 5.59 yuan.

Aluminum Corp of China lost 2.11 percent to 6.96 yuan after saying net income probably fell more than 50 percent last year on lower product prices and shrinking demand.

Yunnan Copper, China's third-biggest producer of the metal, slid 2.08 percent to 9.89 yuan. Yunnan Copper said it had a loss of as much as 2.4 billion yuan.

China International Marine Containers Co, the world's largest maker of shipping containers, said 2008 profit fell by as much as 60 percent to about 1.5 billion yuan due to declines in shipping demand. The stock edged down 0.72 percent to 4.12 yuan.

Bucking the downward trend, ZTE Corp, China's second-biggest telephone network equipment maker, surged 2.11 percent to 29.02 yuan on expectations it will win more orders to build the country's high-speed wireless network.

China will invest 170 billion yuan (US$24.9 billion) on new third-generation mobile phone networks next year, the Ministry of Industry and Information Technology said in a statement yesterday. Total investment in 3G networks over three years will be 400 billion yuan and provide service to 50 million users, the statement said.


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