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Money

Consumer firms lead equities dip

(China Daily)
Updated: 2010-05-13 10:33

SHANGHAI - Most Chinese stocks fell, led by consumer companies and commodity producers, on concern the government will increase borrowing costs to curb accelerating inflation and rising property prices.

More than two stocks declined for each one that rose on the Shanghai Composite Index, which added 8.14, or 0.3 percent, to 2,655.71 at the close.

The CSI 300 Index added 0.6 percent to 2,818.16. The May futures contract on the CSI 300 rose 0.5 percent to 2,829.2.

"Stocks look cheap but we're not out of the woods yet," said Yan Ji, who helps oversee about $1.5 billion at HSBC Jintrust in Shanghai. "Investors are worried further tightening such as interest rate increases will damage the economy."

Tsingtao Brewery slid 2.8 percent to 35 yuan ($5.12). White liquor maker Wuliangye Yibin Co lost 3.3 percent to 24.57 yuan.

Stocks were also buffeted by concern that Europe's $1 trillion bailout is insufficient to end the region's sovereign debt crisis. The European Union is China's biggest export destination.

Zhuzhou Smelter retreated 3.1 percent to 10.78 yuan after commodity prices slumped. Shandong Nanshan Aluminum Co lost 0.9 percent to 9.69 yuan.

The London Metal Exchange Index of six industrial metals, including copper and zinc, declined 1.6 percent on Tuesday.

Bloomberg News