SHANGHAI stocks resumed their morning trade losses and closed lower on higher-than-expected inflation data that may trim the magnitude of monetary easing expected by the market.

The Shanghai Composite Index lost 0.9 percent, or 20.78 points to 2,285.78, with a turnover of 55.1 billion yuan (US$8.7 billion).

"Accelerating CPI kept rational investors at bay, because the higher-than-expected figure damped expectation for monetary easing," said Hou Yingmin, a securities analyst. "Therefore the turnover was low today, and the index didn't fluctuate much," he added.

China's CPI rebounded to 3.6 percent in March from February's 3.2 percent, the National Bureau of Statistics said today on its website.

The figure, which is higher than market expectations, has weighed on market sentiment, and dragged the key index down the most so far this month.

Hou said the climbing inflation is only temporary. "It will fall in April, as the rain season has passed, the prices of vegetables will fall."

The highway builders, whose major income is highway tolls, rallied against the falling index by an average advance of 1.4 percent. According to the earning reports of 19 listed builders, they have beaten property developers in profitability by an average gross margin of 56 percent, Xinhua News reported today.

Jilin Expressway Co, soared 9.6 percent to 2.85 yuan. Henan Zhongyuan Expressway Co, jumped 2.7 percent to 2.66 yuan. Fujian Expressway Development Co, added 1.7 percent to 2.46 yuan.

Shipping companies have been hard hit by the deteriorating European economy. Net profits of nine listed shipping liners plunged 188 percent annually on average in 2011. China COSCO Holdings Co, Asia's biggest shipping liner, has lost 10.4 billion yuan last year. Its shares dropped 2.2 percent to 5 yuan today. China Shipping Container Lines Co, which has suffered a 2.7 billion yuan loss, retreated 0.7 percent to 3.06 yuan.

Source:shanghaidaily