Steel makers, Unicom drag index down at midday

By Lydia Chen  |   2008-6-4  |     ONLINE EDITION

SHANGHAI'S key stock index slumped more than 2.5 percent in the morning session today as steel makers slid. China Unicom also dropped in early trading.

The Shanghai Composite Index lost 2.57 percent, or 88.21 points, to 3,348.18 at 11:30am. The index is comprised of yuan-denominated A shares and hard-currency B shares.

Losers in the Shanghai market outnumbered gainers 718 to 84 while seven were unchanged.

The Shenzhen Composite Index, which tracks the smaller domestic stock exchange, was down 2.14 percent, or 22.09 points, to 1,012.50.

China Unicom slid 8.55 percent to 8.77 yuan (US$1.27) in the early session.

China Unicom announced on Monday in Hong Kong that China Telecommunications Corp and its listed subsidiary China Telecom will pay 110 billion yuan in cash to purchase Unicom's CDMA network assets and business.

Separately, China Unicom's global system of mobile communications business will be merged with the country's No. 2 fixed-line phone operator China Netcom Group Corp through a share swap valued at HK$439.17 billion.

The two moves were parts of the government's proposal on May 24 to reorganize the country's telecommunications industry.

Steel makers slumped after they were ordered to hold prices at levels before the May 12 earthquake in Sichuan Province.

Baoshan Iron & Steel Co, the nation's largest steel maker, declined 1.48 percent to 12 yuan. Maanshan Iron & Steel Co slid 3.06 percent to 7.29 yuan. AnShan Iron & Steel buckled 3.21 percent to 20.19 yuan.

The China Iron and Steel Association ordered its members to hold prices at levels prevailing before the May 12 earthquake, the National Development and Reform Commission, the nation's top planning agency, said yesterday.

Aluminum Corp of China Ltd dropped for a second day after lowering alumina prices for the first time since September.