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Shanghai index slumps six days in a run
Aggregated Source: Shanghai Daily: Business

SHANGHAI stocks extended losses to a sixth straight day as financials continued to suffer amid tight liquidity and coal producers declined on falling coal prices.

The key Shanghai Composite Index shed 8.01 points, or 0.41 percent, to 1,951.50. Daily turnover was 80.9 billion yuan (US$13.3 billion).

The banking sector remained weak due to the ongoing credit squeeze even though the central bank said yesterday that it would adjust liquidity supply from time to time to rein in abnormal fluctuations and stabilize the market.

China Minsheng Banking Corp lost 1.7 percent to 8.30 yuan. China Merchants Bank fell 2.4 percent to 10.66 yuan. Bank of Communications shed 1.7 percent to 3.99 yuan.

"Although the regulators signaled that they will take steps to stabilize the market, the outlook won't improve without concrete measures," said Guosen Securities.

UBS Investment Research today lowered its forecast for the profit growth of China's listed financial firms from 11.6 percent to 10.3 percent, citing hiking borrowing costs, narrowing interest margins and slower credit growth.

Coal producers led the market down after data showed Bohai-rim Steam-Coal Price Index, a weekly gauge of steam coal prices at six ports, fell two weeks in a row.

China Shenhua Energy Co, the nation's biggest coal producer, dropped 3 percent to 16.99 yuan. Shanxi Lu'an Environmental Energy Development Co fell 2.4 percent to 12.05 yuan.

China Securities said there is no impetus for coal prices to rebound as the inventory remained high due to weak demand.

Gold producers fell as Morgan Stanley joined other investment banks to cut its forecast for gold price to US$1,409 per ounce in 2013, down from its earlier estimate of US$1,487.

Zijin Mining Group Co, the nation's biggest gold producer, lost 2.8 percent to 2.39 yuan. Zhongjin Gold Corp fell 1.4 percent to 9.38 yuan.

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