Fall in FDI and Europe's Woes Dent Key Index


SHANGHAI'S stock index lost the most in more than a week yesterday as concerns over a drop in foreign direct investment and the escalating European debt crisis dampened investor sentiment.

The Shanghai Composite Index fell 0.42 percent to close at 2,356.86, paring part of Wednesday's gains.

The Ministry of Commerce said yesterday that FDI in China fell for a third month in January by 0.3 percent from a year earlier to US$9.99 billion. As it battles a debt crisis investment from the European Union, in particular, plunged 42.5 percent annually to US$452 million.

A bailout program to inject 130 billion euros (US$ 170 billion) into debt-ridden Greece was postponed on Wednesday as European leaders wait for more concrete commitments from Athens on spending cuts and labor reforms designed to pull the country out of its debt.

Investors were spooked by the possibility of Greece's default next month and the euro's potential break-up as the region is China's biggest trading partner and source of technology imports.

Miners, refiners and insurers all fell.

Jiangxi Copper, China's biggest producer of the metal, shed 1 percent to 26.5 yuan (US$4.2). Sinopec, Asia's largest refiner, sank 1 percent to 7.64 yuan. Ping An Insurance, the second largest insurer in China, lost 1.4 percent to close at 39.68 yuan.


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