China stocks slip 1.7 pct on economy worries

China's stock market fell on Friday, with banks and metal stocks hit especially hard, after poor data this week indicated the economy was slowing more drastically than expected.

The Shanghai Composite Index ended the morning down 1.69 percent at 1,997.250 points, near an intra-day low of 1,981.051. Losing Shanghai A shares outnumbered gainers by 753 to 159.

Turnover in Shanghai A shares shrank to 34.2 billion yuan ($5.0 billion) from Thursday morning's 46.8 billion yuan.

Data over the past two days showed Chinese exports falling and the threat of deflation rising.

But while the apparent failure to get a bailout bill for the U.S. auto industry through Congress did not have an immediate impact on the Chinese market, it could weigh on stocks later, analysts said.

BANKS

Banks fell after outperforming early in the week; Merchants Bank was down 3.78 percent to 13.48 yuan.

Metal shares slid because of a poor demand outlook for their products. Jiangxi Copper sank 4.84 percent to 12.20 yuan, while Baoshan Iron & Steel was down 3.33 percent to 5.23 yuan.

Western Mining dropped 3.37 percent to 7.17 yuan after saying it would give up the right to buy assets worth a combined 644 million yuan in the western Chinese province of Qinghai from its parent.

Air China, Shanghai Airlines and Hainan Airlines all rose about 5 percent in sympathy.

($1 = 6.84 yuan)

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