Chinese stocks keep losing ground on Tues

Shanghai key index continued to lose ground on Tuesday to nearly one-year low on concerns over imminent rise in interest rate.

The benchmark Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, slumped 4.13% or 143.55 to 3,329.16 points after fluctuating between 3,493.13 and 3,308.90 points. The index booked a loss of 3% on Monday.

Similarly, the Shenzhen Component Index on the smaller Shenzhen Stock Exchange dived 6.33% or 841.52 points to 12,460.62 points after touching an intraday low of 12,419.98 points.

The combined turnover on the two bourses expanded a bit to RMB 109.3 billion from RMB 97.4 billion of the previous trading day.

China's central bank said on Monday that the country would stick to its tight monetary policy as the Consumer Price Index (CPI) hit a near-12-year high of 8.7% in February, well above the annual target of 4.8%. And fresh concerns over first-quarter corporate results further dampened sentiment and undermined investor confidence.

The top 20 heavyweights in Shanghai fell 3.11% on average. PetroChina<601857><857>, the biggest index component, lost 2.26% to RMB 16.83, close to its offering price of RMB 16.7. Baosteel<600019>, the country's largest steel maker, lost 8.7% to RMB 11.33, affected by rising costs of iron ore and other raw materials.

Property developers and agricultural stocks were among the biggest losers yesterday with both sub-index dropped more than 9% on average.

Lenders outperformed yesterday with ICBC led the gains. Industrial & Commercial Bank of China<601398><1398>, the nation's largest bank, edged up 0.4% to RMB 6.88.

As a whole, losers outweighed gainers by 823 to 24 in Shanghai and 678 to 4 in Shenzhen.