Chinese equities lost 2.62 percent on Tuesday amid weak market sentiment in response to news that listed companies' profit growth slowed drastically in the first half of 2008 from a year earlier.
The benchmark Shanghai Composite Index slumped 2.62 percent, or63.29 points, to close at 2,350.08 points. In Shenzhen, the market fell 2.21 percent, or 178.08 points, to close at 7,887.37 points.
Aggregate turnover expanded to 47.2 billion yuan (6.75 billion US dollars) from 40.56 billion yuan on the previous trading day.
Losses outnumbered gains by 772-54 in Shanghai and 646-35 in Shenzhen.
Despite the authorities' recent efforts to bolster the market, investors remained hesitant and hoped for much stronger spurs, analysts said.
Other analysts, however, said that currently no policy could effectively lift up the market sentiment as the outlook of macro economy remained vague.
Today's news said that listed companies' profits grew less than half as fast in the first half of 2008 as they did a year earlier, exacerbating the negative sentiments, analysts said.
As of Monday, 1,178 listed companies, or 72.8 percent of the total, had released interim statements. They earned 323.14 billion yuan in all, up 30.9 percent year-on-year. The year-earlier growth rate was 70 percent.
Most heavyweights declined, dragging the index down.
The Industrial and Commercial Bank of China, the country's biggest lender, was down 1.43 percent to 4.81 yuan.
China Life, the country's biggest life insurer, edged down 0.87percent to 25.02 yuan after reporting a 36 percent fall in its first-half profits from a year earlier.
PetroChina, the country's largest oil company, shed 1.76 percent to 13.37 yuan, in response to rumors that the company planned to issue more stocks on the A-share market. Although the oil giant labelled the rumors as "groundless", it failed to boost the share price.
Sinopec, Asia's top oil refiner, edged down 0.89 percent to 10.04 yuan as an overnight rebound in world crude oil prices renewed concerns that higher costs would erode earnings.
Airline shares also went lower. Air China, the country's largest airline company, slumped 7.86 percent to 5.63 yuan. China Eastern Airlines plummeted 8.75 percent to 4.9 yuan while China Southern Airlines decreased 7.18 percent to 5.17 yuan.
Steelmaker stocks lost heavily after Baosteel Group Corp., the country's largest steelmaker by output, announced that it would cut product prices in October and perhaps the whole fourth quarter as a cooling economy dented demand.
Baosteel fell 5.83 percent to 6.3 yuan. Shares of Wuhan Iron and Steel Corp. dropped 7.47 percent to 7.06 yuan while Angang Steel Company stocks lost 4.78 percent to 9.37 yuan.
(Xinhua News Agency August 27, 2008)
