Chinese shares fall 2.39 percent by midday

Chinese share prices fell 2.39 percent by midday Wednesday as property developers extended their losses on fears they will be further pressured by tight monetary policy, dealers said.

Banks also fell due to worries that the situation could cause cash-flow problems for property firms and lead to increased mortgage defaults by home buyers, saddling banks with bad loans, they said.

The benchmark Shanghai Composite Index, which covers both A and B shares, lost 66.38 points to end the morning at 2,713.07.

China's key economic data for the second quarter, including June inflation figures, are due to be released on Thursday.

The consumer price index for June is expected to be up 7.1 percent from a year earlier, analysts said. Consumer inflation rose 7.7 percent in May, easing from a near 12-year high of 8.7 percent in February.

But investors worry Beijing will leave credit curbing policies in place especially if producer prices, as measured by the producer price index (PPI), continue their fast-paced rise.

"Investors would rather stay on the sidelines ahead of tomorrow's economic data and wait for more cues from key data like the PPI," Li Nian, analyst at Shenyin Wanguo Securities, told Dow Jones Newswires.

Oil refiners, however, bucked the morning's downtrend, supported by an overnight decline in crude oil prices, which sank 6.44 dollars to close at 138.74 dollars a barrel on Tuesday at the New York Mercantile Exchange.

The fall was the sharpest single-session decline since January 1991.

The Shanghai A-share index was down 69.73 points, or 2.93 percent, to 2,845.56 points, while the Shenzhen A-share index fell 30.16 points, or 3.41 percent, to 854.15.

(Agencies)