China shares fall but property, metals limit loss

SHANGHAI, China - Chinese shares joined the global sell-off Thursday but gains in property developers and gold miners provided a floor for the market, partly offsetting losses in banks and insurers.

The benchmark Shanghai Composite Index fell 1.7 percent to 1,983.76, and the smaller Shenzhen Composite Index edged 0.1 percent lower to 556.73.

Despite the gloom on Wall Street, where the Dow Jones industrial average sank 5.1 percent to a five-year low of 7,997.28 overnight, sentiment among Chinese investors is improving after the market's long correction, said Peng Yunliang, an analyst for Shanghai Securities in Shanghai.

"Confidence is certainly recovering thanks to the continuing stimulus moves taken by the government," Peng said. "Investors are easing into the market again as they believe it may be safe, for now, to buy shares, especially some of the cheaper ones," he added.

A Shanghai Securities News report of an imminent deal to build a long-awaited Disney theme park in Shanghai boosted heavyweight property shares even though city government officials denied there has been any progress.

"We have repeated a million times that there is no new progress on the Disneyland project in Shanghai so far," Zhang Qin, an official in the city government spokesman's office said.

Property developer China Vanke rose 2.0 percent to 6.63 yuan, Poly Real Estate Group jumped 3.7 percent to 16.88 yuan and Shanghai Lujiazui Finance & Trade Zone Development surged by the 10 percent daily limit to 16.19 yuan.

News of more government help for textile makers buoyed shares in that sector. Shenzhen Textile hit the upside 10 percent limit at 4.63 yuan, and Apparel maker Youngor Group added 1.8 percent to 8.15 yuan.

Gold miners gained on bargain hunting after losses earlier in the week.

Shandong Gold soared 7.6 percent to 41.85 yuan and Zhongjin Gold climbed 8.1 percent to 32.02 yuan.

Among major decliners, PetroChina, the Shanghai benchmark's largest listed share, fell 2.6 percent to 11.60 yuan, Baoshan Iron & Steel lost 3.4 percent to 5.10 yuan and Ping An Insurance dropped 5.7 percent to 24.13 yuan.

In currency dealings, China's yuan weakened to 6.8357 to the U.S. dollar in late afternoon trading, down from Wednesday's close of 6.8300.

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