SHANGHAI'S stock market yesterday tumbled for the sixth consecutive day on concerns that China will not ease its monetary policies despite a contraction in manufacturing activities.

The Shanghai Composite Index lost 2.1 percent to end at 2,180.9 points, the lowest since March 16, 2009.

The HSBC Flash China Purchasing Managers' Index touched 49 for December, 1.3 points higher than the 32-month low in November but it is still considered as a contraction, an HSBC report said yesterday. A reading above 50 signals expansion, and a contraction if it is below 50.

Qu Hongbin, chief economist with HSBC China, attributed the contraction to "downside risks from exports and the property market."

Wen Yugao, an analyst with Chinadragon Securities, said: "The PMI is at its two-month high but the momentum for economic growth is still weak. Under current situation, the monetary policies next will not change substantially next year."

Meanwhile, Chinese banks lent less in November from a month earlier, the People's Bank of China said on Wednesday after the market closed. New yuan loans totaled 562.2 billion yuan (US$88.2 billion) in November, a drop of 24.6 billion yuan from October's, the central bank said in a statement.

Copper producers declined after metal prices slumped on worries that sluggish industrial activities in China, the world's largest consumer of the metal, may hurt demand.

Jiangxi Copper Co, China's largest producer of the metal, shed 6.5 percent to 21.45 yuan.

Zijin Mining Group, China's largest gold miner, slid 5 percent to 3.81 yuan.

Source:shanghaidaily