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China shares fall on liquidity jitters

China shares fall on liquidity jitters

Chinese shares fell for a third day Tuesday, hitting a three-month low on unease over possible credit tightening, led by developers.
The benchmark Shanghai Composite Index slipped 6.65 points, or 0.2 percent, to close at 2,934.71. The Shenzhen Composite Index for China's smaller second exchange shed 0.6 percent to 1,096.29.
Investors fretted the government might rein in liquidity as it tries to cool inflation.
"The market has developed downward momentum after the benchmark fell below the psychologically important 3,000-point level," said Simon Wang, a strategist for Guoyuan Securities in Shanghai.
Wang warned there were likely to be more losses unless the government steps announces new measures to boost confidence such as the long-awaited launch of margin trading.
China Vanke Ltd., the country's biggest real estate developer, declined 1.4 percent to 9.28 yuan, and rival Poly Real Estate Group down 0.6 percent to 19.37 yuan.
Airline shares lost ground on concerns that higher oil prices will hurt profits. China Eastern Airlines Corp. plunged 5.1 percent to 5.99 yuan, while Air China Ltd. dropped 2.4 percent to 10.19 yuan.
Metals producers rose as commodity prices gained on positive U.S. economic data. Jiangxi Copper Ltd., China's biggest metal producer, added 2.3 percent to 33.62 yuan, while Aluminum Corp. of China edged up 1.4 percent to 12.34 yuan.
In currency markets, the yuan strengthened to 6.8270 to the U.S. dollar, up from Monday's close of 6.8271.