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Weak investor confidence sends stocks downwards at midday

SHANGHAI'S key stock index closed lower at the morning session amid weak investor confidence after yesterday's plunges.

The Shanghai Composite Index dipped 0.8 percent, or 17.57 points, to 2,183.08 points.

The Shenzhen Composite Index, which tracks the smaller domestic market, was down 1.06 percent, or 7.79 points, to 730.14 points.

Automakers had mixed performances after China pledged to encourage consolidation in a bid to enhance industry competitiveness. Media reports cited an unnamed source saying China may encourage Shanghai Automotive Industry Corp and China FAW Group Corp, the two biggest automakers, to buy rivals in a bid to revive the car industry.

SAIC Motor Co, China's largest carmaker, inched down 0.11 percent to 8.82 yuan and FAW Car Co, the Chinese partner of Mazda Motor Corp, added 1.51 percent to 10.76 yuan.

Real estate developers remained weak. China Vanke Co, the country's largest publicly listed property developer, retreated 4.21 percent to 7.5 yuan. Poly Real Estate Group Co, China's second-largest developer by market value, dived 5.43 percent to 18.8 yuan. Cofco Property Group plummeted 6.3 percent to 6.25 yuan and Gemdale Corp, a Chinese partner of ING Group NV, slumped 3.99 percent to 8.43 yuan.

China Life Insurance Co, the nation's biggest insurer sought to buy a 10 percent stake in Hong Kong's Wing Hang Bank Ltd from the Bank of New York Mellon Corp last year, Hong Kong's securities regulator said. The shares slid 0.62 percent to 20.79 yuan.

Renhe Pharmacy Co, the pharmaceutical company, said it will swap as many as 90 million shares valued at 615.7 million yuan (US$90 million) for two drug making units from its parent. The stock dropped 4.17 percent to 11.96 yuan.

Shenzhen Development Bank Co, the Chinese lender controlled by buyout firm TPG Inc, denied a media report that it had been in talks to sell a stake to China Development Bank. The shares tumbled 4.07 percent to 14.38 yuan.


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