Chinese shares fall 1.98 percent in morning trade

Chinese share prices ended Monday morning 1.98 percent lower on renewed concerns over liquidity and weak first-quarter net profits from Sinopec and China Life Insurance, dealers said.

They said the weak results weighed on market sentiment as renewed concerns over liquidity pressure hit financial stocks.

The benchmark Shanghai Composite Index, which covers A and B shares, was down 70.27 points to 3,487.48.

Sinopec slumped over three percent after the company said net profit in the first three months fell 65.8 percent year-on-year due to higher crude oil costs and price caps on domestic fuel prices.

China Life Insurance fell five percent after it reported first-quarter net profit was down 61 percent year-on-year on lower equity investment returns.

Industrial and Commercial Bank of China, the country's largest lender, raised fears about too much supply after it said 2.9 billion of its shares will come out of lockup period Monday.

"Shares coming out of lockup period and weak first-quarter results are all related to major heavyweight stocks, so it will hurt investor confidence," said Cao Xuefeng, an analyst at West China Securities.

The Shanghai A-share index shed 73.84 points or 1.98 percent to 3,659.01 points, while the Shenzhen A-share index was down 14.22 points or 1.28 percent to 1,096.26.

(Agencies)