Chinese shares fell Thursday after the rise in oil prices prompted worries about lower earnings for refiners and airlines, AP reported. The benchmark Shanghai Composite Index fell 1.7 percent to 3,485.6. The Shenzhen Composite Index for China's smaller second market fell 1.5 percent to 1,063.9. Even institutional investors have «become short-term-minded» following China's May 12 earthquake, quickly buying and selling, said Huatai Securities analyst Chen Huiqin. «Investors are expecting the economy to benefit from the post-earthquake reconstruction work in June or July, but until then, trading is likely to remain choppy, especially under the shadow of surging oil prices,» she said. Light, sweet crude for July delivery rose to a record above US$135 a barrel Thursday in electronic trade on the New York Mercantile Exchange. Chinese refiners fell on the expectation that their costs for imported crude would rise. The sector was also weighed down by the government's public dismissal of rumors that it might end controls that bar refiners from passing on rising crude costs to consumers. China's biggest oil company, PetroChina Ltd., fell 2.2 percent. Its No. 2 competitor, China Petroleum & Chemical Corp., or Sinopec, shed 0.9 percent. Their shares had risen earlier this week on rumors that price controls might end. Air China and China Southern Airlines both fell 4.4 percent on a similar concern that the higher oil prices would hurt their earnings. China's currency, the yuan, hit a record against the U.S. dollar for a fourth straight day, rising to 6.943 to the dollar.
