China's shares fall for a seventh session

BEIJING

China's main stock market fell for a seventh session Wednesday to a six-month low amid concern banks might dilute shareholders with stock issues to raise new money.

The Shanghai Composite Index lost 0.3 percent, or 7.6 points, to 2,900.33, its lowest closing since Oct. 12. The Shenzhen Composite Exchange for China's smaller second market edged down 0.5 percent to 1,161.55.

Investor enthusiasm was dented by rumors banks might issue new shares, but concern the government might tighten credit to cool a housing price surge was easing, said Peng Yunliang, a strategist for Shanghai Securities.

"News about the refinancing of banks weighted on the market, but it will help banks raise asset quality and cut nonperforming loans," Peng said. "There is not much room for bank shares to fall further."

Major banks edged up from recent losses. The country's biggest commercial lender, Industrial & Commercial Bank of China Ltd., gained 0.2 percent to 4.47 yuan. Bank of China Ltd. rose 0.3 percent to 4.05 yuan after reporting first quarter profit jumped 41 percent.

Baotou Tomorrow Ltd., a maker of PVC and other chemical products, lost 5.1 percent to 7.56 yuan. Poly Real Estate Group, a major developer, lost 2 percent to 12.44 yuan. Jiangxi Copper Ltd., the country's biggest metals producer, fell 1.5 percent to 33.81 yuan.

In currency markets, China's yuan weakened to 6.8254 to the U.S. dollar, down from Tuesday's 6.8253.