Led by oil stocks, the Shanghai stock market fell for the fourth consecutive day yesterday as PetroChina plunged 9 percent a day after its impressive debut.

The stock market was also weighed down by expectations of further interest rate hikes, triggered by the 0.19 percentage point jump in one-year bill yield at the central bank's auction yesterday and the anticipation of a high October consumer price index, to be released next Tuesday.

The benchmark Shanghai Composite Index dropped 1.74 percent, or 97.88 points, to close at 5536.57. Gainers outnumbered losers 554 to 269.

The Shenzhen Component Index climbed 0.02 percent to close at 18120.57. Turnover on the two bourses shrank to 115.8 billion yuan.

PetroChina, which will be included in the main index on November 19, plunged 9.03 percent to 39.99 yuan after soaring 163 percent on its debut on Monday. The company is weighted 25 percent in the Shanghai Composite Index in terms of market capitalization.

"PetroChina began to return to a sustainable level after the big jump on Monday. It also led to a spread drop of other oil companies," said Wu Feng, an analyst at TX Investment Consulting Co Ltd.

Sinopec dived 8.78 percent to close at 23.68 yuan yesterday and China Oilfield Services Ltd fell 8.31 percent to 38.41 yuan.

Large-cap stocks did not perform well either. China's largest coal producer Shenhua Energy tumbled 2.67 percent to close at 72.31 yuan. The Industrial and Commercial Bank of China dropped 1.57 percent while China Aluminum shed 7.57 percent to 41 yuan.

HK stocks recover

Hong Kong shares recouped some of their losses yesterday, a day after a broad sell-off, with property stocks gaining ground.

The benchmark Hang Seng Index see-sawed between positive and negative terrain, earlier testing the 28,500 support level. It finished up 1.7 percent, or 495.81 points, at 29438.13 on mainboard turnover of HK$169.6 billion compared with Monday's HK$158.8 billion.

The China Enterprises Index of Hong Kong-listed mainland shares gained 1.1 percent to 18484.50.

(China Daily November 7, 2007)