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China stocks tumble after weak opening

2014-02-24 11:45 Xinhua Web Editor: qindexing

Chinese shares plunged following a weak opening on Monday as real estate stocks led the fall and the Chinese currency dipped for a fifth trading day against the U.S. dollar.

The benchmark Shanghai Composite Index opened 0.66 percent lower at 2,099.72 points. It closed morning trading at 2,070.7 points, down 2.03 percent.

The Shenzhen Component Index lost 0.69 percent to open at 7,697.21 points. The index closed at 7,506.78 points, down 3.15 percent.

Real estate stocks dived after unconfirmed media reports over the weekend said several banks were halting their loans to the real estate sector.

The Guangdong-based 21st Century Business Herald also reported on Friday that banks had started to rein in credit to the real estate sector since the start of the year. The report said that banks' headquarters made the decision upon expectations of an economic slowdown, risky asset bubbles and a tightly balanced monetary policy, citing unnamed sources at bank branches.

China Vanke, the nation's largest listed property developer, fell 6.71 percent. Poly Real Estate tumbled 8.24 percent.

The poor performance of the property sector followed government data released on Monday that showed home prices dropped month on month in more Chinese cities in January, signalling a gradually cooling property sector.

Cement, oil, coal and non-ferrous metals also led declines in the morning trading session. Tangshan Jidong Cement fell more than 6 percent; Sinopec slumped 4.4 percent.

On Monday, the value of the Chinese currency, the Renminbi or the yuan, continued to decrease against the U.S. dollar, marking declines for a fifth trading day. It weakened 13 basis points to 6.1189 against the dollar on Monday. Analysts said concerns of an economic slowdown and impact from U.S. tapering of quantitative easing have dampened expectations for the appreciation of the Chinese currency. 

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