Stocks fall nearly 3% on earnings concerns

By Ding Yining  |   2008-10-30  |     NEWSPAPER EDITION

SHANGHAI stocks tumbled nearly 3 percent yesterday, led by the financial sector over concerns that profits will be further eclipsed by the economic slowdown.

The benchmark Shanghai Composite Index buckled 2.94 percent, or 52.01 points, to 1,719.81.

Turnover totaled 36.6 billion yuan (US$5.35 billion), barely changed from Tuesday's 39.7 billion yuan. Losers outnumbered gainers 783 to 81 and 44 stocks remained unchanged.

The index climbed to nearly 1,795 points in the morning session but dived in the afternoon and closed near the 1,700 threshold.

Statistics showed last week the number of accounts active in the A shares market shrank 583,000 from the previous week, which signaled that investor confidence was low.

"The index may go down further since there are still uncertainties in the domestic market which can't escape being affected by the sluggish global economic situation," said Kang Hongtao, an analyst at Guoyuan Securities.

The Industrial and Commercial Bank of China retreated 5.79 percent to 3.58 yuan and China Construction Bank shed 4.64 percent to close at 3.70 yuan. China Eastern Airlines Corp, the nation's third-largest carrier by fleet size, dived 7.35 percent to 3.15 yuan and Air China sank 7.52 percent to 3.69 yuan. The two carriers both posted earnings losses in the third quarter.

Brokerages also suffered on speculation that short selling and margin trading will be halted on concerns over the impact of the ongoing global financial turmoil on the market. Haitong Securities sank 7.77 percent to 19.46 yuan and Sinolink Securities slumped 8.06 percent to 25.34 yuan.