China shares down again as stronger dollar saps funds

Chinese shares fell for a fourth day Friday on worries a stronger U.S. dollar and new stock listings will further strain liquidity. The benchmark Shanghai Composite Index lost 65.19 points, or 2.1 percent, to 3,113.89, ending the week down 4.1 percent. The Shenzhen Composite Index for China's second exchange fell 3.5 percent to 1,127.88. The dollar hit a three-month high against the euro on Thursday, raising worries that foreign investors might withdraw speculative money that has flooded into China in recent months. "Investors might pull their capital from China and Asia to switch to more dollar-related assets to shield risks, after its strong rebound," said Lin Feng, an investment manager for SinoLink Securities in the western city of Chengdu. Friday's losses capped a week overshadowed by initial public offerings that are further contracting liquidity. Close to 900 billion yuan ($132 billion) in funds are already frozen in applications for shares due to list soon on China's new growth enterprise market, the official newspaper China Securities Journal reported Friday. Real estate shares tumbled after the government said late Thursday it would tighten payment rules for land sales to developers, to help curb surging housing prices. Poly Real Estate Group tumbled 7.4 percent to 21.90 yuan while China Vanke Ltd., the country's biggest developer, lost 6 percent to 10.59 yuan. Nonferrous metal and resources shares were battered by falling prices for commodities, which tend to lose ground when the dollar rises. Aluminum Corp. of China dived 8.4 percent to 13.89 yuan, while Jiangxi Copper Ltd., the country's biggest metal producers, shed 6.2 percent to 37.96 yuan. Datong Coal Industry Co. lost 3.5 percent to 45.1 yuan, while China Shenhua Energy Ltd., the country's biggest coal producer, fell 2.4 percent to 33.31 yuan. In currency markets, the yuan edged higher to 6.8281 to the U.S. dollar, from Thursday's close of 6.8285.