Coal producers set tone for local stock tumble

By Cao Qian and Pan Xiaoyi  |   2008-7-24  |     NEWSPAPER EDITION

SHANGHAI stocks fell for a second day yesterday, closing at 2,837.85 with coal producers tumbling the most.

The benchmark Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B shares, retreated 8.27 points, or 0.29 percent after reaching an intraday high of 2,887.58.

Losers outnumbered gainers 577 to 274 while 30 remained unchanged. Turnover in the local market fell slightly to 65.64 billion yuan (US$9.62 billion), compared with 66.37 billion yuan in the previous trading day. ''The market extended its correction with major coal producers plunging heavily,'' said Lin Xuewen, an analyst with Guangzhou Wanlong, a securities consultancy company. ''And airline stocks, assumed to benefit from the approaching Olympic Games as well as the appreciation of the yuan, were among the most actively traded shares.''

China Shenhua Energy Co and China Coal Energy Co Ltd both shed. China Shenhua, the nation's largest coal producer, fell 2.01 percent to 32.69 yuan while China Coal Energy retreated 1.54 percent to 14.02 yuan.

Pingdingshan Tian'an Coal Mining Co Ltd slumped 5.25 percent to 29.75 yuan and Yanzhou Coal Mining Co, the listed unit of China's fourth-biggest coal miner, lost 3.06 percent to 18.99 yuan.

Financial stocks remained slack. China Merchants Bank Co, the country's biggest dual-currency credit-card issuer, inched up 0.88 percent to 24.07 yuan while China Construction Bank increased 1.01 percent to 6.01 yuan. China Life Insurance Co Ltd, the country's largest insurer, climbed 0.19 percent to 26.39 yuan.

Airlines, however, soared on the retreat of oil prices in the global market.

China Eastern Airlines, the country's third-largest carrier in terms of fleet size, jumped 4.16 percent to 7.77 yuan and Shanghai Airlines rose 4.13 percent to 6.56 yuan. China Southern Airlines Co, the nation's largest in fleet size, gained 1.72 percent to 8.29 yuan while Air China, the flag-carrier which operates the bulk of international routes, climbed 0.94 percent to 10.72 yuan.

Low turnovers in recent trading days had obstructed a rebound of the key index, industry analysts said.