[R]6:00AM New York, 6:00PM Hong Kong – Stocks in Hong Kong and Shanghai dropped on a weakness in financials. China’s consumer price index falls 1.5% in April. China’s new bank loans drop in April after surging in March. Hang Seng Index replaces Yue Yuen with China Resources Power and maintains 42 constituents.[/R]

The benchmark stock index dropped 1.7% in Hong Kong and 2.3% in Shanghai as caution returned to the market after consumer prices dropped 1.5% in April.

Chinese shares had previously increased for seven consecutive trading days.

In Hong Kong trading Hang Seng Index fell 1.7% or 301.92 to 17,087.95, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, declined 2.9% or 287.63 to 9,764.27.

In Shanghai trading CSI 300 Index plunged 2.3% or 63.90 to 2,725.32.

Hang Seng Index Drops Yue Yuen

Hang Seng Indexes Company after it quarterly review replaced Yue Yuen Industrial (Holding) Ltd. with China Resources Power Holdings Co.

The compiler of the index had not altered the index in the last three quarterly reviews and dropped China Netcom Group Corp after it merged with China Unicom Ltd.

China CPI Drop 1.5% in April

National Bureau of Statistics in China reported today the country’s consumer price index, the key measure of inflation, declined 1.5% year-on-year in April, dropping for the third straight month.

Food prices fell 1.3% as pork prices shed 28.6% on falling demand. Non- food prices slipped 1.5%.

The report also notes producer price index- gauging inflation at the wholesale level- declined 6.6% in April from a drop of 6% in March.

However the PPI dipped 5.1% between January and April moths from the same period a year ago.

China to Stimulate Non-Ferrous Metal Industry

China’s State Council on Cabinet announced today a three-year plan that is oriented to stimulate the country’s non-ferrous metal industry.

According to the plan, the sector is expected to keep a steady operation in 2009 and realize sustainable development by 2011.

The sector will also be restructured to form five nonferrous metal corporations with advanced production capacity and technological innovation capability by 2011.

China Bank Credits Fall in April

The People’s Bank of China reported today that new bank loans dropped to Rmb591.8 billion in April after staying above Rmb1 trillion in three consecutive months. The loans surged to Rmb 1.89 trillion in March.

Outstanding loans in financial institutions increased 29.7% to Rmb35.55 trillion by the end of April.