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Markets descend, scandal continues to plague brewers

By Yu Xi  (Global Times)

09:39, November 27, 2012

Stock markets in Shanghai and Shenzhen took a dive Monday, with brewing and Internet stocks leading the way in losses.

The Shanghai Composite Index fell 9.92 points, or 0.49 percent, to close at 2,017.46; while the Shenzhen Component Index slumped 1.22 percent, or 98.67 points, to finish at 8,016.07.

Both indices opened lower Monday and retreated in early trading. Strong performances in the non-ferrous metal, aviation manufacturing and steel sectors helped the markets climb higher later in the morning session. Weakness in brewing, Internet, agriculture, animal husbandry and cement stocks chipped away at the early gains in afternoon trading and ultimately pulled both markets below their previous close by the end of trading.

Makers of alcoholic beverages were again among the day's biggest losers as the fallout from a recent safety scandal continued to cloud the brewing sector. Last week reports emerged that products from Jiugui Liquor Co had been found to contain toxic levels of plasticizing agents. The distiller, which had been temporarily suspended from trading last week, plunged to the daily limit to 38.54 yuan ($6.19). Anhui Gujing Distillery Co gave up 4.07 percent to 28.72 yuan.

According to analysts, the losses posted by brewers have weighed heavily on the mainland markets over the past week. Judging by recent sell-offs of industry leaders such as Wuliangye Yibin Co and Jiangsu Yanghe Brewery Joint-Stock Co, some predict that the sector may continue to lose steam in the days ahead.

On the positive side, gold and shipping stocks performed well. Zhongjin Gold Corp climbed 2.57 percent to close at 15.57 yuan. Jewelry retailer Laofengxiang Co added 3.85 percent to 19.95 yuan. Guangzhou Shipyard International Co edged up 1.61 percent to 11.33 yuan.

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