Shanghai shares fall 4.5 per cent, partly on quake losses

Shanghai shares fall 4.5 per cent, partly on quake lossesBeijing  - China's main stock market fell by nearly 4.5 per cent on Tuesday, partly influenced by damage caused by last week's earthquake in Sichuan province.

The Shanghai Composite Index, which tracks shares traded in local and foreign currencies, posted its biggest fall since April 23.

The index ended Tuesday at 3,443.16, down 4.48 per cent, or 161 points, as banks and Sichuan-based firms led the plunge.

The smaller Shenzhen Component Index also lost about 5 per cent of its value.

Citic Securities and China Merchants Bank were among the shares that led the fall in Shanghai, losing about 6 per cent and 4 per cent, respectively, the Shanghai Daily newspaper reported.

Sichuan-based firms Dongfang Electric and Sichuan Hongda both fell by their 10-per-cent daily limit in Shanghai, the newspaper said.

But China Eastern Airlines and Shanghai Airlines both gained amid speculation that they might negotiate a merger.

The government on Monday said the magnitude-8 earthquake on May 12 caused estimated losses of 67 billion yuan (9.7 billion dollars), or nearly 0.5 per cent of China's gross domestic product, to 14,207 industrial companies.

Tuesday was the first day of trading since the earthquake for shares in some Sichuan-based firms, including Sichuan Hongda, which were suspended for five days.

Sichuan Hongda, a major zinc producer, reported estimated losses of 387.7 million yuan and the death of at least 74 employees in the earthquake, the newspaper said.

Shares in the Bank of China, the country's third-largest bank, also dropped by 2.85 per cent after it announced estimated losses of up to 160 million yuan from the earthquake.

Several other Chinese banks face large losses from the earthquake, mostly through loans to Sichuan-based firms that they might be forced to write off. (dpa)

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