China shares lower in early trade led by airlines, banks

China shares were lower in early trade with liquidity remaining under pressure due to IPO subscriptions and worries about a possible interest rate hike going into the weekend, dealers said.

Investors continued to sell heavyweight banks and take profits on airline stocks.

At 9:48 am, the Shanghai Composite Index was down 41.97 points or 0.85 pct at 4,916.08.

China Eastern Airlines Corp Ltd (SHA 600115; HK 0670; NYSE CEA) fell 0.68 yuan to 18.49. The carrier's president Li Fenghua said late yesterday that the proposed strategic partnership with Singapore Airlines and Temasek is the "only and ultimate option" to further its restructuring plans.

China Southern Airlines Co Ltd (SHA 600029; HK 1055; ADR ZNH) tumbled 1.14 yuan to 25.69, and Air China Ltd (SHA 601111) shed 0.69 yuan to 25.06.

Industrial and Commercial Bank of China (ICBC) (SHA 601398; HK 1398) fell 0.17 yuan to 7.93 after it resumed trading today. Trading in its shares was suspended yesterday for a shareholder meeting.

At the meeting, its shareholders approved a proposal to take a 20 pct stake in Standard Bank Group Ltd, the largest bank in Africa by assets, for 42.31 bln hkd.

China Petroleum & Chemical Corp (Sinopec) (SHA 600028; HK 0386; NYSE SNP) fell 0.34 yuan or 1.54 pct to 21.73, after the official Shanghai Securities News said the company is not likely to obtain government subsidies this year.

(1 usd = 7.4 yuan)