SHANGHAI'S key stock index declined to the lowest in six weeks yesterday amid concerns that the deteriorating eurozone debt crisis may further slow China's economy.

The Shanghai Composite Index, echoing other declining Asian markets, shed 0.3 percent to end at 2,325.91 points, the lowest since October 21.

The market was clouded by fears of a looming global double-dip recession after Standard & Poor's warned 15 European nations, including AAA-rated Germany and France, of potential downgrades as the world waited with abated breath the results of a European Union leaders' summit due later this week.

Manufacturers paced the decline in Shanghai's stock market as weakening demand from China's largest trading partner, the European Union, could further crimp the country's exports. Shanghai Zhenhua Heavy Industries slumped 2.4 percent to 5.33 yuan.

"The Chinese producers who derive most of their revenues from sales in Europe are facing great pressure to rely on China to digest its excessive output," Ma Yao, macro-economic analyst at CIConsulting, said.

Financial shares also fell as foreign capital flow out of China. The yuan touched the low end of its permitted trading range against the US dollar for the fifth day yesterday. It hit 6.3651 to the dollar soon after opening.

The Industrial and Commercial Bank of China lost 1.9 percent to 4.20 yuan. The Agricultural Bank of China slid 1.5 percent to 2.56 yuan.

Source:shanghaidaily