SHANGHAI stocks fell to the lowest level in nearly seven weeks, dragged down by property developers after the central government hinted expanding the property tax trial to more cities.
The benchmark Shanghai Composite Index lost 1.5 percent to 2,047.89 points, the lowest closing since September 26. Daily turnover was 44.6 billion yuan (US$7.1 billion).
The government won't relax its current restrictions on home purchases in the short term and is studying an expansion of the property tax trial, said Jiang Weixin, minister of housing and urban-rural development.
China launched the property tax trial in 2011 in an effort to cool speculative activities in the overheated housing market. Shanghai and Chongqing are among the first cities to collect tax from second-home buyers.
Poly Real Estate, China's second largest developer, declined 1.4 percent to 11.46 yuan. Gemdale Corporation fell 3.8 percent to 5.25 yuan. Guangzhou Pearl River Industrial Development Co dropped 6.9 percent to 9.63 yuan. Zhongzhu Holding Co dived by the daily limit of 10 percent to 8.21 yuan.
Brokerages also tumbled on speculation that the government will soon cancel the floor price for commissions, a move that may fuel a price war among brokerages and further cut their earnings. Data showed the gross profit of 19 brokerages listed in Shanghai and Shenzhen plunged 38 percent in October.
CITIC Securities, the country's biggest listed brokerage, sank 1.6 percent to 10.69 yuan. Haitong Securities Co decreased 3.4 percent to 8.44 yuan. Soochow Securities Co dropped 4.1 percent to 7.42 yuan. Sinolink Securities Co slumped 6.5 percent to 14.21 yuan.
Oil-related stocks fell on speculation the government is likely to lower retail prices of refined oils by 300-350 yuan per ton. China Petroleum and Chemical Co, China's largest oil refiner, slipped 0.8 percent to 6.19 yuan. PetroChina Co, the second biggest player, lost 1.4 percent to 8.63 yuan. 
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