Reform plan fails to offer tonic to shares

Shanghai stocks fell the most in seven weeks yesterday as a reform plan of the Communist Party of China did not give details on how to overhaul the world's second-largest economy and failed to provide a sparkling tonic to investors.

The Shanghai Composite Index lost 1.83 percent, the biggest daily fall since September 26, to 2,087.94 points.

China unveiled a long-awaited reform agenda for the next decade after the CPC Central Committee concluded its plenary meeting on Tuesday, which stressed the market would play a decisive role in allocating resources. The agenda also pledged further land reform and more property rights for farmers.

"The communique from the meeting delivered no major surprises and is largely in line with our expectations," said Zhu Haibin, chief China economist with JPMorgan.

He said there is "a lack of concrete details with regard to many aspects of reforms mentioned in the communique," which was general in nature.

UBS Securities cautioned in its latest report that many of the reforms may face difficulties during implementation.

Lenders slumped after data from the China Banking Regulatory Commission showed non-performing loan ratio at Chinese banks rose to 0.97 percent at the end of the third quarter, up from 0.96 percent at the end of June.

Shanghai Pudong Development Bank lost 4.7 percent to 9.64 yuan (US$1.58). China Minsheng Banking Corp slumped 4.4 percent to 8.55 yuan and China Merchants Bank fell 3.3 percent to 10.33 yuan.