China shares fall on policy uncertainty

Chinese shares fell Tuesday to a seven-week low, led by real estate stocks amid fears the government will take steps to slow other sectors of the economy after vowing to control rising property prices.

The benchmark Shanghai Composite Index dropped by 72.45 points, or 2.3 percent, to close at 3,050.52, the lowest since Oct 30. The Shenzhen Composite Index for China's smaller second exchange fell 2.7 percent to 1,109.37.

A short-lived rally Monday fizzled amid concern about the direction of economic policy sparked by the government's announcement that it would take steps to slow a rise in housing prices, analysts said.

"They are worried that the government will also take such quick and drastic policies in other industries," said Cao Xuefeng, an analyst for Huaxi Securities in the western city of Chengdu.

Investors took profits on real estate shares. China Vanke Ltd., the country's biggest developer, off 3.9 percent to 10.3 yuan, and rival Poly Real Estate Group down 2.8 percent to 21.52 yuan.

Nonferrous shares fell on sliding commodity prices. Aluminum Corp. of China sank 4.5 percent to 13.47 yuan. Jiangxi Copper Ltd., the country's biggest metal producers, lost 4 percent to 35.88 yuan.

Industrial & Commercial Bank of China Ltd., China's biggest commercial lender, declined by 1.4 percent to 5.07 yuan. China Construction Bank Ltd. fell 1.7 percent to 5.74 yuan, while Bank of China Ltd. dropped by 0.7 percent to 4.1 yuan.

In currency markets, the yuan weakened to 6.8287 to the U.S. dollar, down from Monday's close of 6.8276.

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