Chinese shares fall 2.09 percent in morning trade

Chinese share prices tumbled 2.09 percent in Friday morning trade led by PetroChina after the biggest index component broke through its issue price for the first time, dealers said.

The market saw volatile trade in the morning as the key index slumped over four percent to reach a one-year intraday low at 3,078.17, but it regained some territory as heavyweight banks narrowed their losses.

PetroChina lost 3.38 percent to 16.30, cracking its issue price of 16.70 last November for the first time, but analysts suggested it might be a positive signal that the market will bottom out soon.

"PetroChina's sharp fall hit investor confidence, bringing the key index below 3,100," said Wu Feng, an analyst at TX Investment Consulting.

"However, the weakness in PetroChina may stimulate a technical rebound in the near term."

Power firms continued to fall further after leading utilities issued first-quarter profit warnings, which intensified investor fears that rising prices of raw materials are eroding corporate profits.

Huaneng Power International, one of the country's leading power producers, slipped 3.46 percent to 6.98 after it said first-quarter earnings are expected to fall by more than 50 percent due to rising thermal coal prices.

The benchmark Shanghai Composite Index, which covers A and B shares, was down 67.51 points at 3,155.23. The key index has tumbled nearly 50 percent following its peak on October 16 last year.

The Shanghai A-share Index shed 70.66 points or 2.09 percent to 3,311.02, while the Shenzhen A-share Index lost 17.80 points or 1.75 percent to 1,001.72.

(Agencies)