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Mainland stocks continue dive, NBS data spooks investors

By Yu Xi  (Global Times)

08:35, August 28, 2012

Stock markets in Shanghai and Shenzhen extended Friday's retreat into Monday after falling profits from large-scale domestic companies in July amplified investor fears about the nation's decelerating economy.

The Shenzhen Component Index surrendered 2.06 percent, or 177.13 points, to finish at 8,402.15; while the Shanghai Composite Index sank 36.40 points, or 1.74 percent, to end at 2,055.71 Monday, its lowest close since March 2009.

Both markets opened lower Monday thanks to a carryover in weak sentiment from the end of the previous week. The Shanghai Composite and Shenzhen Component descended in the morning session, despite large gains in gas heating, banking and real estate stocks. The indices continued to step down in the afternoon as the rare earth, securities and insurance sectors took heavy losses.

More than 90 percent of domestic stocks fell Monday, and analysts cited a decline in July profits among the country's largest industrial companies as a major contributing factor behind the broad tumble. The total profits of domestic industrial enterprises with annual revenues over 20 million yuan ($3.15 million) declined 5.4 percent year-on-year to 366.8 billion yuan last month, according to figures released by the National Bureau of Statistics (NBS) Monday.

Insurance companies were also among the biggest losers Monday. China Life Insurance (Group) Co, also a State-owned insurance group with assets exceeding 1 trillion yuan, shed 3.61 percent on the day to end at 16.56 yuan. The company had predicted in early August that its first-half net profit would decline year-on-year.

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