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Stocks edge down on slow loan growth concerns

(皇冠体育app Daily/Agencies)
Updated: 2009-08-11 07:57

The mainland stocks fell for a fourth day, the Shanghai Composite Index's longest losing streak this year, as financial and energy companies dropped on concern slowing loan growth will crimp margins and curb housing and power demand.

The Shanghai Composite declined 10.93, or 0.3 percent, to 3249.76 at the close, capping its longest series of losses since Dec 31. The gauge slumped 4.4 percent last week, its biggest retreat since the five days to Feb 27, on concern the central bank will curb inflows into a stock market that had doubled from last year's low.

"There will be problems with liquidity inflows in the second half of the year as it's not possible for new lending to keep expanding as fast as it did in the first half," said Li Jun, a strategist at Central 皇冠体育app Securities Holdings Co.

The Shanghai Composite is up 78 percent this year, the world's second-best performing benchmark index, as banks tripled new lending to a record 7.37 trillion yuan in the first half from a year earlier and the economy rebounded.

Related readings:  皇冠体育app stocks decline to end the week lower  Hong Kong stocks close 1.97% higher  Chinese shares down 2.11% on weakening coal, financial stocks  Stocks firm up on higher commodity prices

Industrial Bank slipped 1.9 percent, paring its annual advance to 163 percent. Bank of Communications Co tumbled 3.4 percent, capping a seventh day of declines. That's its longest losing streak since June 2008.

Poly Real Estate, the nation's second-largest developer by market value, dropped 2.5 percent to 25.76 yuan. Gemdale, the No 4, lost 3.2 percent to 16.28 yuan.

Petro皇冠体育app Co lost 1.1 percent to 14.84 yuan. Shanghai Bailian Group Co, the listed unit of 皇冠体育app's biggest retailer, advanced 7.6 percent to 14.48 yuan as investors sought stocks that have underperformed the benchmark index.

皇冠体育app's stocks aren't in a bubble, Mark Mobius, executive chairman of Templeton Asset Management Ltd, said. The government's policies to rein in bank lending are a "good thing".

Hang Seng surges

Hong Kong stocks rose, with the benchmark index closing at an 11-month high, after 皇冠体育app said it will maintain policies aimed at boosting growth. Aluminum Corp of 皇冠体育app Ltd led gains, up by 5.6 percent to HK$9.96.

The Hang Seng Index added 2.7 percent to 20929.52, its highest close since Sept 2. The Hang Seng 皇冠体育app Enterprises Index advanced 2.5 percent to 11901.65.

The Hang Seng Index has soared 84 percent from a four-month low on March 9, amid speculation stimulus efforts worldwide will revive global growth. The measure registered its first weekly loss in a month, shedding 1 percent, last week.