Chinese share prices closed down 0.76 percent to end at a 25-month low on Tuesday as pessimism over the domestic economy continued to drag down local bourses, dealers said. Property developers and coal miners led the decline amid worries over weakening corporate earnings, traders said.
Investors would rather stay on the sidelines until the government launched strong and supportive measures to boost the economy, analysts said. "Investors lack confidence in the economy because there's been little notable improvement despite the government's recent measures such as monetary easing and property trading tax cuts," Huatai Securities' Zhou Lin told Dow Jones Newswires. The benchmark Shanghai Composite Index, which covers A and B shares, closed down 13.07 points to 1,706.70 on turnover of 23.8 billion yuan (3.5 billion dollars).
The Shanghai A-share index fell 13.74 points, or 0.76 percent, to 1,793.06 on turnover of 23.7 billion yuan, while the Shenzhen A-share index lost 9.63 points, or 1.97 percent, to 480.30 on turnover of 9.9 billion yuan. The yuan closed the day at 6.8384 against the US dollar, almost flat from Monday's finish of 6.8381.
Coal producers fell as domestic coal prices declined further due to dwindling electricity demand, because an increasing number of manufacturers lowered output amid a slowing economy. Datong Coal Industry fell 6.3 percent to 11.33 yuan, while Hebei Jinniu Energy Resources hit the 10 percent daily downside trading limit at 11.44 yuan.
Real estate developers also suffered heavy losses Tuesday, as domestic sales remained stagnant despite Beijing's recent market-boosting measures, which included lowering the transaction tax for first-time home buyers.
China Vanke, the country's largest real estate developer by market value, dropped 7.1 percent to 5.50 yuan, with Poly Real Estate was down 7.5 percent at 12.94 yuan. The Shanghai B-share Index fell 0.63 points, or 0.71 percent, to 88.16, while the Shenzhen B-share Index lost 2.04 points, or 0.91 percent, to 223.22.
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