China shares ease as investors weigh quake impact

BEIJING, May 29 (Xinhua) -- Chinese shares fell for the first time in three days on Thursday, as investors reacted to the economic uncertainty caused by the magnitude 8.0 earthquake on May 12.

Analysts said that investors were looking for more government support policies, though the National Development and Reform Commission said on Wednesday that the quake would not increase inflation or do much to curb economic growth.

The benchmark Shanghai Composite Index fell 57.59 points, or 1.66 percent, to 3,401.44, retreating from the intra-day high of 3,481.73. The key index gained 2.51 percent on Wednesday, buoyed by a comment by Fan Fuchun, vice chairman of the China Securities Regulatory Commission, that stock index futures were about ready to begin trade.

The Shenzhen Component Index fell 366.52 points on Thursday, or 2.98 percent, to close at 11,947.14.

The Hushen 300 Index, which reflects about 60 percent of the combined market value in Shanghai and Shenzhen, closed at 3,580.87 points, down 95.36, or 2.59 percent.

Losses outnumbered gains by 728 to 108 in Shanghai and by 585 to 89 in Shenzhen. Aggregate turnover reached 101.3 billion yuan (14.6 billion U.S. dollars), compared with Wednesday's 100.8 billion yuan.

The major indices were dragged down mainly by financial, steel and property stocks, analysts said.

All banks fell. Industrial and Commercial Bank of China, the nation's largest, dropped 1.35 percent to 5.83 yuan. Shenzhen Development Bank slid 4.66 percent to 24.95 yuan.

Brokerages, driven up by Fan's stock futures comment on Wednesday, fell on profit taking and concerns that light stock trading volume would reduce their earnings. Citic Securities tumbled 4.69 percent to 32.70 yuan.

Some analysts said Fan's comment did not mean that index futures would start trading soon, as the new hedging product would require the approval of the State Council, or cabinet.

Insurers dropped on worries over equities investment losses and huge claims from the massive earthquake. China Life shed 2.69 percent to 28.99 yuan and Ping An Insurance lost 3.39 percent to 53.91 yuan.

China Vanke slumped 4.43 percent to 19.22 yuan. Baoshan Iron and Steel was down 3.72 percent to 12.16 yuan.

Sinopec and PetroChina both rallied, following reports that China is likely to ease fuel price controls next month. The government has refrained from raising fuel prices despite record crude prices, on fear that any hikes could further fan inflation, which is already near a 12-year high.

Sinopec added 2.58 percent to 13.12 yuan and PetroChina gained 1.43 percent to 17.72 yuan.