Index dips over concern interest rates will rise

By Lydia Chen  |   2008-6-30  |     ONLINE EDITION

SHANGHAI'S key stock index slipped today as financial companies retreated due to concern interest rates will be increased for the first time this year.

The Shanghai Composite Index lost 0.45 percent, or 12.33 points, to 2,736.10 at 3pm.

Gainers in the Shanghai market outnumbered losers 443 to 316 while 14 were unchanged.

The index dropped nearly 5.3 percent on Friday.

The Shenzhen Composite Index, which tracks the smaller domestic stock exchange, was down 0.34 percent, or 2.73 points, to close at 793.13 today.

China Merchants Bank Co and Shanghai Pudong Development Bank Co led declines. Aerospace-related shares increased and were led by Xi'an Aircraft International Corp on a report its parent company will start sales of a commuter plane next year.

Merchants Bank, China's most profitable lender, declined 4.91 percent to 23.42 yuan (US$3.41). Pudong Bank, part-owned by Citigroup Inc, declined 4.31 percent to 22 yuan, its lowest close since May 23, 2007.

China Petroleum & Chemical Corp, known as Sinopec, the country's biggest oil refiner, lost 1.17 percent to 10.15 yuan after Friday's 9.12 percent fall. PetroChina, the nation's largest oil producer and the biggest stock by market capitalization, fell 0.40 percent to 14.94 yuan.

PetroChina Co may import record volumes of oil products this year and will extend a halt in exports to increase domestic supplies of gasoline and diesel, parent China National Petroleum Corp said on Friday.

Baoshan Iron & Steel Co, the country's largest steel maker, retreated 2.46 percent to 8.71 yuan. Baoshan Iron, the parent of Baoshan Iron & Steel, aims to raise sales to more than US$50 billion and profit to more than US$5 billion by 2012, the company said on Saturday.