A wide sell-off today dragged Shanghai's key stock index to nearly a one-year low, headed by industrial shares such as steel makers and oil-related stocks.
The Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B shares, plunged 5.42 percent, or 195.36 points, to 3,411.49 at 3pm.
This is the lowest since April 9 last year when it stood at 3,398.95.
Losers in the Shanghai market outnumbered gainers 795 to 45, while 12 were unchanged.
The Shenzhen Composite Index, which covers the mainland's smaller stock market, was down 4.21 percent, or 48.52 points, to 1,105.12.
The Shanghai index has dropped more than 40 percent from its peak in mid-October on concern the government would raise interest rates to curb inflation running at an 11-year high. Last week, the People's Bank of China told lenders to set aside more reserves for a second time this year, after the central bank raised interest rates six times in 2007.
Baoshan Iron & Steel Co led steel makers lower after its 2007 profit dropped because of higher raw-material costs.
China Petroleum & Chemical Corp and PetroChina Co declined after a government report showed earnings growth of the country's industrial companies slowed in the first two months of this year.
Baoshan Steel, China's biggest maker of the alloy, shed 8.99 percent to finish at 13.06yuan (US$1.86), the most in two months. The company said 2007 profit fell 2.7 percent to 12.7 billion yuan,
Net income fell 2.7 percent to 12.7 billion yuan last year, Baoshan Steel said in a statement late yesterday.
Baoshan Steel Chairman Xu Lejiang this month said market conditions would be more difficult this year as costs rise and the government reins in lending.
China Petroleum & Chemical, known as Sinopec, the nation's largest oil refiner, fell 8.45 percent to 11.38 yuan, while PetroChina, the biggest oil producer, extended past losses and slid 8.31 percent to 16.99 yuan.
This was the first time PetroChina has fallen below its initial public offering price of 16.70 yuan on November 4.
Datang International Power Generation Co, the biggest Chinese electricity producer by market value listed in Hong Kong, sank 5.29 percent to close at 12.89 yuan. The company said it boosted 2007 profit 32 percent to 3.4 billion yuan after expanding power generation.
Chinese industrial companies reported combined profit rose 16.5 percent in January and February, the National Statistics Bureau said today. The gain was 44 percent in the first two months of 2007.
The country's industrial production grew at the slowest pace in more than a year in January and February as exports slowed, according to government data.
Insurers also decreased today.
China Pacific Insurance (Group) Co headed for its lowest close since its December 25 initial public offering after 300 million additional shares became available for trading yesterday.
China Pacific, the nation's third-largest insurer, lost 7.47 percent to 25.89 yuan. The stock dipped below its IPO price of 30 yuan for the first time yesterday.
China Life Insurance Co, the nation's largest insurer, fell 6.08 percent to 26.71 yuan. The company will focus more on bond investments and reduce stock holdings this year, according to Chief Investment Officer Liu Lefei.
(Shanghai Daily March 27, 2008)
