Chinese shares fall 2.51 percent by midday

2008-07-15 06:23:30 GMT       2008-07-15 14:23:30 (Beijing Time)       SINA.com

SHANGHAI, July 15, 2008 (AFP) - Chinese share prices fell 2.51 percent by midday Tuesday as inflation concerns dragged down most of the market but gave gold mining companies a boost, dealers said.

Interest in gold miners rose alongside spot metal prices, reflecting investors' anxiety, traders said. Gold is often seen as a cushion for investors seeking to hedge against inflation.

The benchmark Shanghai Composite Index, which covers both A and B shares, shed 72.34 points to end the morning at 2,805.92.

China's June inflation figures are due to be released on Thursday.

"The fact that gold miners are leading the gainers isn't a good sign -- it's a mark of investors' lack of confidence as gold is seen as a haven when the global economy is bothered by inflation concerns," Industrial Securities analyst Zhang Yidong told Dow Jones Newswires.

Banks and property developers are bearing the brunt amid fears Beijing will further tighten money supply to tame inflation. Those sectors' earnings are most vulnerable if the central bank hikes interest rates, analysts said.

The Shanghai A-share index was down 76.05 points, or 2.52 percent, to 2,943.06 points, while the Shenzhen A-share index shed 19.44 points, or 2.13 percent, to 894.52.

(Agencies)

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