After rising for seven consecutive trading days, Chinese shares declined 1.75 percent on Monday as caution returned upon the release of official economic statistics.
The benchmark Shanghai Composite Index declined 1.75 percent, or 45.9 points, to close at 2579.75. The Shenzhen Component Index dropped 3.09 percent, or 314.27 points, to 9868.79.
Encouraged by a Wall Street rally on Friday, shares on both bourses opened higher and hit record highs of 2,663 and 10,347 points in the morning, but went lower despite the strong performance of blue-chip stocks.
China's consumer price index (CPI) and producer price index (PPI), the main gauge of inflation at retail and wholesale level, fell 1.5 percent and 6.6 percent, respectively, year on year in April, the National Bureau of Statistics said Monday.
The result was largely in line with market expectations and analysts' forecasts, but it still triggered profit-taking activities when investors sought ways to relieve the pressure building from previous gains, said analysts.
Qi Jingmei, senior economist of State Information Center, said the fall of CPI and PPI, which might have reflected slack in both demand and supply, would dampen the optimism of many investors.
Coal, oil and alternative energy shares led the fall. Gansu Jingyuan Coal Industry & Electricity Power Co. plunged 9.96 percent to 12.65 yuan, and Huayi Electric Company slid 8.21 percent to 15.31 yuan.
Gold shares followed, with Zhenzhou Mining Group Co. down 6.21 percent to 15.7 yuan, and Zhongjin Gold Corp. losing 5.63 percent to 60.01 yuan.
Financial shares managed to have a relatively better performance despite the overall market fall. The Bank of Communications closed up 1.11 percent to 7.3 yuan, while Shanghai Pudong Development Bank, China Minsheng Banking Corp. and Bank of Beijing all reported gains.
After the first swine flu case was confirmed on Chinese mainland, when a 30-year-old Chinese mainland male was tested positive for the A/H1N1 influenza, medical-related shares prospered. The sector had suffered strong sell-off pressure through last week.
Guilin Layn Natural Ingredients Corp. rose to the daily limit of 10 percent to 19.9 yuan, and Daan Gene Co. was up 10 percent to 12.43 yuan.
Losers outnumbered gainers by 754 to 100 in Shanghai, and 645 to 72 in Shenzhen.
Combined turnover expanded to 264.4 billion yuan (38.88 billion U.S. dollars) from 244.3 billion yuan last Friday.
(Xinhua News Agency May 11, 2009)
