SHANGHAI'S stocks yesterday fell the most in nearly a week as companies were unnerved by news of a fuel price increase, leading to a tumble for many of them.

The Shanghai Composite Index extended Monday's loss and dropped 1.38 percent to 2,376.84 points.

The National Development and Reform Commission, China's top economic planing body, announced on Monday that the retail prices of gasoline and diesel would go up yesterday by 600 yuan (US$95) per ton to cope with the recent spike in global crude oil prices. After two price increases this year, the fuel prices have now reached a record high.

China's dominant fuel providers lost the least on hopes that the price rise may pare part of their losses in the oil refining sector. Sinopec fell 0.52 percent to 7.60 yuan, and PetroChina dropped 0.49 percent to 10.21 yuan.

Li Chang'an, an associate professor at University of International Business and Economics, warned that increasing fuel prices may trigger a relapse into high inflation.

Worries over rising costs dented road transport firms. Jiangxi Changyun Co dived 5.16 percent to 9.55 yuan.

Automakers fell after an industry group said China's vehicle sales growth this year may miss its forecast. SAIC Motor Corp lost 3.76 percent to 14.35 yuan, and Chongqing Changan Automobile Co shed 3.89 percent to 4.45 yuan.

Aviation and shipping firms also waned. Air China lost 2.68 percent to 6.54 yuan, and China Southern Airlines shed 2.83 percent to 4.81 yuan. China COSCO Holdings Co, Asia's biggest shipping liner, sank 2.65 percent to end at 5.14 yuan.

Source:shanghaidaily