SHANGHAI stocks slipped yesterday, with the nation's biggest oil producer weighing down on the market after reporting a slump in profit while concerns over inflation persisting.

The Shanghai Composite Index lost 0.1 percent to 2,612.19 points. The index gained 3.1 percent this week, the first weekly advance in six weeks.

PetroChina Co, China's top oil producer and one of the biggest heavyweights in the Shanghai market, shed 0.6 percent to close at 10.04 yuan (US$1.57). Its net income fell 12 percent to 29 billion yuan from a year earlier, according to calculations based on half-year earnings it reported.

Meanwhile, concern intensified the central bank won't ease monetary policies, after Zhang Ping, head of the National Development and Reform Commission, China's top economic planning agency, cautioned that the country still faced inflationary pressure despite market expectations that inflation may fall in August.

"Global liquidity will remain abundant in the short term and imported inflationary pressure has not eased by much," Zhang said during a bimonthly session of the National People's Congress Standing Committee, adding that other factors keeping prices high include rising production costs, seasonal supply shortages of farm produce and the fear of natural disasters.

Hao Kang, a Beijing-based fund manager at ICBC Credit Suisse Asset Management Co, said: "Concerns over inflation and tightening measures are restraining the market."

The Industrial and Commercial Bank of China, the country's largest lender, lost 0.5 percent to 4.16 yuan.

Source:shanghaidaily