SHANGHAI stocks fell yesterday after news that China's foreign direct investment dropped in March, adding concerns that the country is being hurt by the global financial woes.

The Shanghai Composite Index lost 0.94 percent, the most in more than two weeks, to end at 2,334.99 points.

The Ministry of Commerce yesterday said China's FDI declined for a fifth straight month in March by an annual 6.1 percent to US$11.76 billion, while for the first quarter it fell 2.8 percent to US$29.48 billion due to the slowing economy.

The drop in inbound investment has renewed concerns about the deteriorating European debt crisis.

"The investment outlook in 2012 is grim," said Shen Danyang, a spokesman for the ministry. "There's no proper solution for Europe's debt crisis yet, which has cut European companies' spending in China."

Investment by the European Union in China plunged 31.2 percent in the first three months from the same period of last year, according to the data published by the ministry.

Property developers plunged 2.8 percent on average after Shanghai Mayor Han Zheng said in a meeting the city will keep its tough measures on the property market in the second quarter.

Poly Real Estate, China's second-biggest listed developer, fell 2.9 percent to end at 11.64 yuan (US$1.85).

Source:shanghaidaily