Shares down 0.57% on strong inflation data

BEIJING—Chinese share prices continued to fall on Tuesday after the release of strong inflation data for October.
China’s consumer price index (CPI), the main gauge of inflation, rose 6.5 percent last month compared with the same period in 2006, the National Bureau of Statistics said on Tuesday.
The figure was up from the 6.2 percent recorded in September and the same as the previous 11 year monthly record set in August.
The benchmark Shanghai Composite Index, which covers both A and B shares, fell 29.61 points, or 0.57 percent, to close at 5,158.12in volatile trading.
The key index, which rebounded 1.88 percent to finish the morning session at 5,285.45, traded between 5,311.70 and 5,085.44.
The Shenzhen Component Index on the nation’s smaller Shenzhen Stock Exchange dropped 317.88 points, or 1.86 percent, to 16,747.89.
The Hushen 300 index, accounting for 60 percent of the nation’s total stock market value, slipped 39.01 points, or 0.78 percent, to 4,939.24.
The morning session’s recovery came on bargain hunting and after a fund had been approved to open for additional subscriptions later this week. It is seen as a new signal from the government to back up the stock market.
On Nov. 4, the China Securities Regulatory Commission issued a notice ordering fund firms not to expand the promised scale of their funds within six months.
Analysts said shares started to fall in afternoon trading as investor confidence failed to pick up amid fears for further economic tightening measures, including interest rate hikes.
It was unrealistic to expect a huge rebound in the near future, as the market was in the initial period of correction, said Wan Bing, a Guangfa Securities analyst.
The Shanghai Composite Index plunged 2.4 percent on Monday after China’s central bank raised the reserve requirement by 50 basis points to a 10 year high of 13.5 percent.
Last week, the key index fell 8 percent to 5,315.54, the biggest weekly loss during the past nine years.
Banking shares led the market drop as all lenders except for the Bank of Nanjing and Bank of Ningbo fell.
Heavyweights Industrial and Commercial Bank of China shed 2.08 percent to 8 yuan and Bank of China dropped 1.70 percent to 6.94 yuan. China Minsheng Banking Corp. plunged 7.10 percent to 16.36 yuan.
Gains in the energy giants abated the market fall.
China Petroleum and Chemical Corporation, better known as Sinopec, gained 3.74 percent to 23.01 and PetroChina, the nation’s largest oil and gas producer, added 1.59 percent to 37.03 yuan.
The A share index on the Shanghai Stock Exchange fell 31.06 points, or 0.57 percent, to 5,415.13 and the B share index fell 2.21 points, or 0.67 percent, to 330.03 percent.—Xinhua