European shares fall, Asia markets mixed

Telecoms, seen by some analysts as a safer play during periods of high inflation, rose. China Netcom was up almost 4 percent and its suitor, China Unicom, gained 2.1 percent.

Hong Kong rose despite weakness in mainland China, where the key Shanghai index skidded 1.2 percent to 2,669.89 points.

Chinese coal shares fell on fears of a possible coal resource tax revenue plan, which could be announced this weekend.

One of the day's worst-hit stocks was coal producer China Shenhua Energy Co., which closed down 8.1 percent. China Coal Resources dropped 7.9 percent. Xishan Coal and Electric Corp. plunged by 10 percent, the daily limit.

Most institutional investors remain worried about the big picture, said Fan Zejie, an analyst for Shanghai Leading Investment and Consulting Co. Ltd.

"There are too many uncertainties in the next half-year, like inflationary pressures brought by natural disasters, the management of non-tradeable shares and the high production prices of raw materials," Fan said.

___

AP Business Writer Jeremiah Marquez contributed to this report from Hong Kong.