Shanghai market falls as oil shares decline

By Lydia Chen  |   2008-7-4  |     ONLINE EDITION

SHANGHAI'S key stock index declined today as concern increased that record oil prices will hurt earnings.

Losses would have been heavier, but most banks increased on the back of profit forecasts.

The Shanghai Composite Index lost 1.24 percent, or 33.64 points, to 2,669.89 at 3pm.

Gainers in the Shanghai market outnumbered losers 444 to 343 while
35 were unchanged.

The Shanghai index lost 78.54 points, or 2.86 percent, this week.

The Shenzhen Composite Index, which tracks the smaller domestic stock exchange, was up 0.03 percent, or 2.23 points, to 812.

China Petroleum & Chemical Corp and PetroChina Co, the country's two biggest refiners, dropped on concern production costs will increase.

China Petroleum & Chemical Corp, or known as Sinopec, the country's biggest oil refiner, lost 3.19 percent to 9.42 yuan (US$1.37) while PetroChina, the biggest oil producer and the biggest market heavyweight, decreased 2.24 percent to 14.38 yuan.

Oil in New York was recently at US$145.50 a barrel after climbing yesterday to a record US$145.85. Crude has gained 52 percent this year.

China Shenhua Energy Co led coal producers lower after a newspaper reported China may increase a tax on the fuel's production.

Shenhua Energy, Asia's largest coal producer, slumped 8.13 percent to 31.96 yuan. Shanxi Xishan Coal & Electricity Power Co tumbled 9.48 percent to 42 yuan.

China may increase the resource tax on coal production this weekend, the Shanghai-based National Business Daily reported today, without saying where it got the information.

Ping An Insurance (Group) Co, the nation's second-largest insurer, fell even after saying it doesn't need to make financial provisions for its investment in Fortis, whose stock has plummeted 44 percent this year. Ping An was down 0.94 percent to 40.17 yuan.

Ping An dropped 18 percent this week amid concern it's being investigated for tax irregularities.