Stocks in Shanghai fell for a third straight trading day today due to a broad sell off of shares in the banking and property sectors on concerns the central bank may raise interest rates for a sixth time this year to cool economic growth.

 

The Shanghai Composite Index, which tracks both yuan-denominated A shares and hard-currency B shares, was down 0.87 percent, or 46.45 points, to 5,269.82 at 3pm today.

 

But the Shenzhen Composite Index, which covers the smaller mainland stock market, gained 1.22 percent, or 15.78 points, to 1,303.75.

 

Among the stocks on the Shanghai Composite Index, 683 rose, 92 fell and 72 were unchanged.

 

Real estate developers and banks were bearish today on speculation the government may raise interest rates as well as the amount of capital lenders have to set aside in reserves to curb the booming economy. Higher interest rates make loans such as mortgages more expensive, discouraging house purchases.

 

China Vanke, the nation's biggest listed property developer, slid 3.99 percent, or 1.37 yuan (18 US cents), to 32.93 yuan.

 

Poly Real Estate Group Co, China's second-largest developer by market value, plunged 8.42 percent, or 6.74 yuan, to 73.26 yuan while Gemdale Corp, a Chinese developer that's partnered with ING Groep NV, slumped 4.69 percent, or 2.47 yuan, to 50.24 yuan.

 

Shanghai Pudong Development Bank Co fell 3.90 percent, or 2.06 yuan, to 50.80 yuan. China Minsheng Banking Corp, the nation's only non-state bank, declined 2.46 percent, or 0.40 yuan, to 15.89 yuan.

 

China's consumer price index matched its decade high rise of 6.5 percent in October and the trade surplus widened to a record of US$27.05-billion last month.

 

The People's Bank of China this month raised the proportion of deposits that lenders must set aside as reserves to 13.5 percent, the highest since at least 1987.

 

Gold and copper producers continued to be gloomy after metal prices slumped.

 

Zhongjin Gold, China's No. 1 listed gold miner by market value, fell 5.12 percent, or 5.21 yuan, to 96.61 yuan. Shandong Gold Mining Co, the second-largest publicly traded gold producer, lost 2.76 percent, or 4.08 yuan, to close at 143.49 yuan.

 

Jiangxi Copper, the second-largest producer of the metal, was down 2.17 percent, or 1.11 yuan, to 49.98 yuan.

 

Copper stocks dropped as prices of the metal traded near an eight-month low in Shanghai and global inventories rose to their highest level since April.

 

Inventories monitored by the London Metal Exchange were up four percent last week to 179,650 tons, the highest since April 4.

 

Copper for January delivery rose as much as two percent to 59,390 yuan a ton on the Shanghai Futures Exchange before falling as much as 0.5 percent.

 

Elsewhere, China Life Insurance Co, the world's biggest insurer by market value, booked 170.1 billion yuan in premiums during the first 10 months of this year, according to a statement to the Shanghai Stock Exchange. The insurer didn't provide year-earlier figures. China Life lost 4.12 percent, or 2.69 yuan, to 62.66 yuan.

 

(Shanghai Daily November 19, 2007)