Stocks in Shanghai dipped this morning, sending the index to its eighth decline in nine days as banks continued to perform weakly on concerns of more possible monetary policy changes.

 

The Shanghai Composite Index, which tracks both yuan-denominated A shares and hard-currency B shares, was down 0.54 percent, or 28.36 points, to 5,241.46 at 11:30am today.

 

But the Shenzhen Composite Index, which covers the smaller mainland stock market, gained 0.95 percent, or 12.32 points, to 1,316.07.

 

Among the stocks on the Shanghai Composite Index, 553 rose, 214 fell and 79 were unchanged.

 

Banks were bearish this morning after People's Bank of China Governor Zhou Xiaochuan said yesterday that the central bank will continue to "withdraw liquidity'' by raising the amount lenders have to set aside in reserves. But he denied that the central bank will raise interest rates next week.

 

Shanghai Pudong Development Bank Co fell 2.17 percent, or 1.10 yuan (15 US cents), to 49.70 yuan. Industrial & Commercial Bank of China, the nation's biggest listed lender, lost 1.48 percent, or 0.12 yuan, to 8 yuan.

 

But China Minsheng Banking Corp, the nation's only non-state bank, recovered from yesterday's losses and edged up 0.76 percent, or 0.12 yuan, to 16.01 yuan.

 

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.

 

Copper producers continued to be gloomy after copper tumbled to an eight-month low in New York as rising inventories signaled slackening demand for the metal used in pipes and wires.

 

Jiangxi Copper, the second-largest producer of the metal, was down 1.06 percent, or 0.53 yuan, to 49.45 yuan while Yunnan Copper Industry Co, the third-largest miner of the metal in China, slumped 3.09 percent, or 1.78 yuan, to55.82 yuan.

 

Copper futures for March delivery fell 5.4 percent to US$3.025 a pound on the Comex division of the New York Mercantile Exchange. That marked the lowest closing price for a most-active contract since March 21.

 

Elsewhere, GD Power Development Co, a unit of one of China's five largest electricity producers, jumped 3.25 percent, or 0.54 yuan, to 17.18 yuan this morning.

 

The company said it will pay 375.6 million yuan for a 20-percent stake in Shijiazhuang City Commercial Bank in North China. The deal is still pending approval from China's banking regulator, it said.

 

(Shanghai Daily November 20, 2007)