China stocks retreat on Eurozone concerns

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China's stocks retreated Thursday as fears over the sovereign debt crisis in Europe weighed down shares.

The benchmark Shanghai Composite Index lost 22.98 points, or 0.99 percent, to close the day at 2295.95 points, while the Shenzhen Component Index slipped 64.75 points, or 0.65 percent, to close at 9,885.29.

Combined turnover on the two bourses shrank to 137.01 billion yuan (21.68 billion U.S. dollars) from 142.8 billion yuan the previous trading day.

Losers outnumbered gainers by 721 to 204 in Shanghai, and by 1,009 to 424 in Shenzhen.

Investors were rattled by growing threats of European debt woes after international rating agency Moody's on Wednesday downgraded the Spanish sovereign debt from A3 to Baa3 with a negative outlook.

Many feared more financial turbulence if the upcoming Greek election on Sunday puts the party against the currently austerity plan in power and increases chances of the country's exit from the Eurozone.

Cement producers led the decline, as investors worried that economic uncertainties would sap construction demand. Shares of Gansu Qilianshan Cement Group Co., Ltd. plunged 4.95 percent to 12.09 yuan, and those of Henan Tongli Cement Co., Ltd. dipped 3.59 percent to 11.01 yuan.

Auto firms bucked the trend after China's Ministry of Finance on Wednesday issued an old-for-new trade-in auto program for 2012, a bid to boost the sluggish auto market and facilitate its emissions-reduction efforts.

SG Automotive Group Co., Ltd., based in northeast China's Liaoning province, saw its shares surge by the daily limit of 10 percent to 5.87 yuan. Shenzhen-based automaker BYD Co., Ltd. rose 3.41 percent to 23.34 yuan.

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