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Tumbles in overseas markets send Shanghai key index lower

SHANGHAI'S key stock index closed lower yesterday following drops in the United States and other overseas markets as investors were increasingly concerned the global financial crisis will deepen.

The Shanghai Composite Index fell 1.05 percent, or 22.02 points, to 2,071.43 points. Gainers outnumbered losers 438 to 421 while 27 stocks were unchanged. Turnover rose a little to 79.9 billion yuan (US$11.75 billion), compared with 72.2 billion yuan on Monday.

"The US market hit a new low overnight after AIG reported a loss of US$61.7 billion in the fourth quarter in 2008," said Li Gang, an analyst from Jiangnan Securities Co. "Worsening markets overseas severely hurt the domestic market sentiment. The local benchmark index is fluctuating as it tries to seek the bottom line."

Li said that sectors expecting government support outperformed the others.

The annual meeting of China's top advisory body started in Beijing yesterday.

Commodities producers led losses on talk the worsening economic situation will further dampen the demand for resources. PetroChina Co, the index's biggest component, slid 1.49 percent to 10.56 yuan while Jiangxi Copper Co lost 1.74 percent to 15.21 yuan. Zhongjin Gold Co, China's second-largest producer of the metal, plunged 5.29 percent to 8.23 yuan as gold retreated for a sixth day.

Lenders also lost, with China Merchants Bank Co falling 3.9 percent to 14.05 yuan while Shanghai Pudong Development Bank slumped 3.86 percent to 16.94 yuan and Industrial & Commercial Bank of China shed 1.35 percent to 3.65 yuan.

Among gainers, Beijing Sanyuan Foods Co, a dairy firm, rose by the 10 percent daily cap to 6.66 yuan after saying shareholders approved a plan to bid for bankrupt Sanlu Group Co's assets.


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