China shares flat amid unease over housing policy

SHANGHAI

Chinese shares ended flat Tuesday as real estate and banking stocks slid amid lingering unease over government moves to cool housing prices.

The benchmark Shanghai Composite Index slipped 0.76 points, or 0.03 percent, to close at 2,979.53, a day after losing nearly 5 percent. The Shenzhen Composite Index for China's smaller second exchange edged up 0.3 percent to 1,179.28.

Investors were unsettled after the government said Monday developers can no longer take deposits from buyers of unbuilt homes without official permission in its latest step to curb speculative purchases blamed for soaring prices.

"The slide of property shares, leading indicators of the benchmark, might trigger further drops of the market," said Zhou Yu, an analyst for Pacific Securities in Beijing.

A leading builder, COFCO Property (Group) Co., plunged by 5.1 percent to 7.86 yuan, while the country's biggest developer, China Vanke Ltd., lost 3.3 percent to 8.03 yuan.

Industrial & Commercial Bank of China Ltd., China's biggest commercial lender, gave up 1.1 percent to 4.61 yuan, while China Construction Bank Ltd. declined 0.4 percent to 5.31 yuan.

Oil companies also were sluggish. China Petroleum and Chemical Corp., known as Sinopec, dropped 2.1 percent to 10.66 yuan, while PetroChina Ltd., Asia's biggest oil and gas producer, shed 0.6 percent to 12.42 yuan.

Pharmaceutical shares, seen as defensive investments, rose amid weakness elsewhere, Shandong Dong-E E-Jiao Co., a traditional medicine producer, soared 6.6 percent to 33.87 yuan. Guangzhou Pharmaceutical Co. gained 4.4 percent to 13.16 yuan.

In currency markets, the yuan weakened to 6.8255 to the U.S. dollar, from Monday's close of 6.8262.

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Associated Press researcher Bonnie Cao in Beijing contributed to this report.