Energy shares drag down Shanghai index at midday

By Lydia Chen  |   2008-11-4  |     ONLINE EDITION

SHANGHAI’S key stock index fell in the morning session today, led by energy and commodity companies, after oil prices slumped and Yunnan Tin Co announced a production cut because of reduced demand.

The Shanghai Composite Index lost 1.66 percent, or 28.51 points, to 1,691.27 points at 11:30am.

Losers outnumbered gainers 711 to 100 while 17 did not change.

The Shenzhen Composite Index, which tracks the smaller domestic market, was down 2.29 percent, or 10.65 points, to 455.40 points in the morning session.

China Shenhua Energy Co, the nation's largest coal producer, lost 4.99 percent to 17.15 yuan (US$2.51). Datong Coal Industry Co, the second largest, dropped 7.44 percent to 11.19 yuan.

PetroChina Co, the nation's biggest oil company and the biggest market heavyweight, dipped 0.1 percent to 10.28 yuan.

Crude oil for December delivery lost 5.8 percent to US$63.91 a barrel in New York yesterday, its biggest drop since October 22.

PetroChina awarded a gas-station construction contract worth 80 million yuan to China Petroleum Jilin Chemical Engineering & Construction Co, according to a statement to Shanghai's stock exchange today. China Petroleum Jilin added 0.60 percent to 5 yuan.

Yunnan Tin, the world's largest producer of the metal, slid 7.35 percent to 8.07 yuan. The company said it plans to cut production by 30 percent in the fourth quarter because of falling demand and prices.

Elsewhere, China Railway Construction Corp said yesterday that the Nigerian government asked the company to suspend construction of an US$8.3 billion project in the African country until the contract has been redefined. China Railway Construction, builder of more than half the nation's rail links since 1949, sank 9.46 percent to 7.75 yuan.