Special Report: Global Financial Crisis

    BEIJING, Oct. 31 (Xinhua) -- Chinese shares dropped 1.97 percent on Friday, the month's last trading day.

    The benchmark Shanghai Composite Index lost 1.97 percent, or 34.82 points, to close at 1,728.79. The Shenzhen index was down 1.19 percent, or 70.33 points, to close at 5,839.33 points.

    The combined turnover was 35.23 billion yuan (5.03 billion U.S.dollars), compared with 49.35 billion yuan on the previous trading day. Losses outnumbered gains by 656 to 199 in Shanghai and 576 to151 in Shenzhen.

    Almost all sectors fell except industries related to aircraft making after the Commercial Aircraft Corporation of China Ltd. (CACC) announced Chinese indigenous regional jets would be sold to the United States, analysts said. CACC is not a publicly traded company.

    Coal companies suffered the most losses. Kailuan Clean Coal Co.lost 7.21 percent to 10.3 yuan. Taiyuan Coal Gasification Company fell 4.34 percent to 7.50 yuan.

    "I don't think the fall was related to recent mine accidents. It was a reflection of diminishing global energy demand," said Alex Xue, analyst with JL McGregor & Company.

    The finance sector also dropped by an average of 3 percent. CITIC securities lost 2.46 percent to 17.84 yuan. Bank of Communications fell 4.20 percent to 4.33 yuan.

    According to estimates from Friday's China Securities News, third-quarter profits of the country's 1,466 listed companies would fall 10.17 percent from the same period a year ago and 18.41 percent from the previous month to 206.09 billion yuan.

    Operating net cash flow fell 51.75 percent to 827.4 billion yuan in the first three quarters. Analysts said rising material costs and weakening demand led to slumping profits.

    The country's industrial output value growth slowed to 11.4 percent in September, the lowest rate since April 2002, the National Development and Reform Commission said on Thursday.

    Despite the latest rate cut, which was viewed as helpful to stabilizing the stock market, analysts said the market could possibly continue falling. The long-term affects from the rate cut are yet to been seen.