Falling steel makers dragged Shanghai's key stock index down again today on speculation earnings growth of listed companies will slow down this year.

Goldman Sachs & Co said today in a report that companies including steel makers are "most vulnerable" to earnings downgrades.

The Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B shares, slid 4.13 percent, or 143.55 points, to 3,329.16 at 3pm.

Losers in the Shanghai market outnumbered gainers 819 to 20, while 13 were unchanged.

The Shenzhen Composite Index, which covers the mainland's smaller stock market, was down 7.32 percent, or 80.46 points, to 1,018.03.

Pretax profits for industrial companies with more than five million yuan (US$713,000) in annual sales rose 16.5 percent in the first two months, compared with a year earlier, according to Goldman Sachs analysts led by Thomas Deng, in a note. That compares with full-year growth of 37 percent in 2007, the report said.

This could signal a "less benign earnings growth scenario for selected industrial equities in 2008," it said.

Baoshan Iron & Steel Co, China's biggest steel maker, dropped 8.70 percent to 11.30 yuan, the lowest in eight months. Wuhan Iron & Steel Co, China's fifth-biggest steel maker by output, lost 7.96 percent to 13.06 yuan.

Gold producers suffered a major slump this morning. Zhongjin Gold, the largest producer of the metal, and Shandong Gold, the second largest, both plummeted below the daily cap of 10 percent today.

Gold futures for June delivery dropped 1.6 percent to US$921.50 an ounce in New York yesterday, rounding up a 5.5 percent decline in March, after a decline in commodity prices reduced demand for precious metals as a hedge against inflation.

Shandong Gold yesterday said 2007 profit surged 55 percent to 368 million yuan as the price of the precious metal gained and production increased.