Shanghai index declines at midday

By Chen Li  |   2008-7-11  |     ONLINE EDITION

SHANGHAI'S key stock index declined in the morning session today after oil prices jumped and Angang Steel Co said an accounting rule change may cut earnings, renewing concern that corporate profit growth may slow.

The Shanghai Composite Index lost 1.35 percent, or 38.83 points, to 2,836.62 at 11:30am.

Losers in the Shanghai market outnumbered gainers 614 to 193 while 12 remained unchanged.

The Shenzhen Composite Index, which tracks the smaller domestic stock exchange, was down 1.75 percent, or 15.23 points, to 854.79.

Air China, the world's biggest airline by market value, fell 2.91 percent to 9.67 yuan (US$1.42). China Southern Airlines Co, the nation's biggest carrier by fleet size, dropped 2.03 percent to 7.71 yuan. Jet fuel accounted for about 40 percent of Chinese airlines' costs in 2007, according to their annual reports.
Crude oil yesterday soared 4.1 percent to settle at US$141.65 a barrel in New York, the biggest one-day increase since June 6. It was little changed at 141.60 a barrel in after-hours trading.

But the rising oil price didn't lift PetroChina, the country's largest oil producer in the morning session today. PetroChina, the biggest component in the market, lost 1.04 percent to 15.08 yuan while Sinopec, the biggest oil refiner, dipped 0.10 percent to 10.33 yuan.

Angang Steel, China's second-biggest steel maker by value, retreated 3.99 percent, to 13.49 yuan, extending yesterday's 3.1 percent decline. Angang said its 2008 profit will be cut by 126 million yuan because of changes in the rules for asset depreciation.

China Construction Bank Corp, the nation's second-largest bank, decreased 2.11 percent to 6.04 yuan. The bank said first-half profit may have surged more than 50 percent on higher interest and commission income.