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Chinese stocks fall after RRR cut

05-14-2012 18:05 BJT

BEIJING, May 14 (Xinhua) -- Chinese shares closed down Monday after the country's central bank announced a second cut in banks' reserve requirement ratio (RRR) this year to buoy the economy.

The benchmark Shanghai Composite Index fell 0.6 percent to close at 2,380.73.

The Shenzhen Component Index lost 1.16 percent to finish at 10,093.38.

Combined turnover on the two bourses rose to 164.8 billion yuan (26.14 billion U.S. dollars) from 147 billion yuan the previous trading day.

Losers outnumbered gainers by 531 to 358 in Shanghai and by 828 to 535 in Shenzhen.

The People's Bank of China said late Saturday that it will lower the RRR by 50 basis points starting from May 18, a move that will allow banks to lend more.

The move came after key economic data in April, such as industrial output and fixed-asset investment released Friday, suggested the economy faces further downward pressures.

Stocks on the two bourses opened higher but lost momentum towards the close as investor's sentiment remained low.

Banking shares led the decline. China Construction Bank, the country's second largest lender by market value, fell 1.5 percent to close at 4.61 yuan per share. Agricultural Bank of China, the country's fourth largest lender, slid 1.47 percent to 2.69 yuan.

Shipmakers extended losses on Monday, with CSSC Jiangnan Heavy Industry Co., Ltd. and Sainty Marine Co. down 6.11 percent and 2.04 percent to finish at 18.89 yuan and 21.16 yuan, respectively.

Bucking the trend, brokers and property developers gained. Sealand Securities Co., Ltd., surged 6.25 percent to close at 26 yuan, and Zhejiang Guangsha Co., Ltd. rose 5.89 percent to 5.21 yuan.

Editor:Wang Lingfei |Source: Xinhua

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