Chinese shares fall on slowing inflation

Chinese stocks closed lower on Monday after the country's consumer prices slowed in September, underlining weakness in the world's second-largest economy.

The benchmark Shanghai Composite Index fell 0.3 percent, or 6.23 points, to finish at 2,098.7.

The Shenzhen Component Index closed at 8,621.97, down 28.23 points, or 0.33 percent.

Combined turnover shrank to 92.93 billion yuan (14.75 billion U.S. dollars) from 105.5 billion yuan the previous trading day.

Losers outnumbered gainers by 661 to 269 in Shanghai and by 1,097 to 413 in Shenzhen.

China's consumer price index, the main gauge of inflation, grew 1.9 percent year on year in September, down from 2 percent in August.

The producer price index (PPI), which measures inflation at the wholesale level, dropped 3.6 percent year on year in September. It marked the seventh straight month of decline after the PPI dropped in March for the first time since December 2009.

The slowing inflation rate showed that price gains had been brought under control but also reflected overall weakness in China's economy, which expanded 7.6 percent in the second quarter of the year, the lowest pace in more than three years, analysts said.

Communication equipment manufacturers led the declines, as ZTE Corporation forecast a loss of 1.75 billion yuan for the third quarter. The company slid by the 10-percent daily limit to close at 9.45 yuan per share. Beijing Jiaxun Feihong Electrical Co. also fell by 10 percent to finish at 9.1 yuan.

Entertainment and culture-related stocks plunged on Monday after rallying on the previous trading day after Chinese writer Mo Yan was awarded the 2012 Nobel Prize in Literature.

Shanghai Xinhua Media Co. dropped 4.98 percent to close at 5.92 yuan per share, while Tangel Publishing Co. slid 7.83 percent to finish at 13.18 yuan.