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1st Ld-Writethru: China stocks extend losses

Xinhua, January 30, 2015 Adjust font size:

Chinese shares extended losses on Friday with concerns of tight liquidity and further government regulation of the stock market.

The benchmark Shanghai Composite Index went down 1.59 percent to end at 3,210.36 points, while the Shenzhen Component Index fell 0.87 percent to end at 11,150.69 points.

Total turnover on the two bourses further shrank to 507.9 billion yuan (about 81.3 billion U.S. dollars) from Thursday's 528.9 billion yuan.

Sun Xiwei, an analyst with CITIC Securities, attributed the declining market mainly to speculations about regulation to rein in margin trading, and concerns about inadequate liquidity.

The stock market plunged, by more than 7 percent, on Jan. 19 after the regulator decided to punish brokerages for violating rules governing margin trading.

China's securities regulator moved late on Wednesday to deny market rumors that a second round of margin trading inspection has begun, but this failed to stop the market from declining.

Share prices of heavyweights including oil producers, insurers and railway builders all fell, with oil giant PetroChina going down 2.84 percent, China Railway Construction diving 6.42 percent and China Pacific Insurance declining 5 percent.

Despite the setbacks, Sun expects the stock market prices to rise to new highs in 2015 thanks to authorities' efforts to develop the country's capital market. Endi