Wednesday August 13, 05:36 AM
China A-shares end morning lower led by banks, property stocks -UPDATE
SHANGHAI (XFN-ASIA) - China A-shares finished the morning lower, with the benchmark composite index in decline for a fourth straight day.
Banks led a broad retreat, tracking losses on Wall Street, after JPMorgan Chase & Co reported that losses on its mortgage holdings widened from the second quarter.
Property stocks also slumped after property price growth slowed in July from June.
The benchmark Shanghai Composite Index ended the morning down 62.51 points or 2.54 pct at 2,394.69. The index dropped by a total of nearly 10 pct in the previous three trading days.
'Banks and property stocks dragged the market lower,' said Wang Fan, an analyst with Donghai Securities. 'Turnover was still sluggish... the best strategy now is to stay on the sidelines.'
Analysts noted that turnover in the Shanghai and Shenzhen A-share markets was less than 50 bln yuan yesterday, the lowest level in 20 months.
Such levels of turnover is unlikely to support a significant rebound on the market, they noted.
'The downward trend is hard to avert without intervention by the government, as hopes for macroeconomic growth have not improved. Investors are also worried about the number of shares coming out of lockup in August,' said Zhang Gang, an analyst with Central China Securities.
China Life Insurance (SHA 601628; HK 2628) fell 4.31 pct to 23.51 yuan and Bank of Beijing (SHA 601169) lost 5.44 pct to 9.91 yuan.
Haitong Securities (SHA 600837) shed 2.98 pct to 16.91 yuan after sliding 10 pct yesterday.
Property developers fell after the National Development and Reform Commission (NDRC) announced late yesterday that property prices in 70 major Chinese cities rose 7.0 pct year-on-year in July, down from 8.2 pct in June.
China Vanke (SZA 000002; SZB 200002), the top property developer by market value, was down 1.54 pct at 7.01 yuan, while Poly Real Estate Group (SHA 600048) shed 2.96 pct to 13.13 yuan.
Steelmakers were hit by profit-taking after yesterday's gains. Angang Steel (SZA 000898;HK 0347) slid 2.24 pct to 10.06 yuan after gaining 5 pct yesterday and Baoshan Iron & Steel (SHA 600019) fell 2.81 pct to 6.91 yuan.
Jinan Iron & Steel (SHA 600022) dropped 4.64 pct to 8.42 yuan, although it announced an unaudited first half net profit of 1.058 bln yuan, which would indicate a major gain from audited net profit of 670.24 mln yuan in the first half of 2007.
Gold miners were also weak as the precious metal sank to its lowest level of the year as crude oil continued its retreat.
Zijin Mining Group (SHA 601899; HK 2899), China's second largest gold miner, declined 2.83 pct to 5.15 yuan. The company has agreed to buy the remaining 40 pct interest that it does not already own in subsidiary Qinghai West Copper Mining Co, in a deal worth 864 mln yuan.
Shandong Gold-Mining (SHA 600547) lost 3.59 pct to 36.56 yuan and Zhongjin Gold (SHA 600489) shed 4.46 pct to 33.01 yuan.
China Southern Airlines (SHA 600029; HK 1055; ADR ZNH) lost 3.56 pct to 5.69 yuan. The company said it carried 5.34 mln passengers in July, down 1.9 pct from a year earlier.
Qingdao Haier (SHA 600690), China's top white goods producer, slid 4.17 pct to 8.50 yuan after clarifying that it is not participating in a bid for General Electric (NYSE: GE - news) 's appliance unit, denying earlier reports.
China Shipping Development (SHA 600026; HK 1138) rose 1.58 pct to 16.07 yuan after reporting that first half net profit rose 44 pct from a year earlier to 3.185 bln yuan.
Huaneng Power International Inc (0902.HK - news) (SHA 600011; HK 0902) gained 3.07 pct to 7.72 yuan. It raised generating capacity on an equity basis to 36,993 megawatts (MW) from 36,393 MW previously.
The Shanghai A-share Index was down 65.46 points or 2.54 pct at 2,513.53, while the Shenzhen A-share Index fell 17.40 points or 2.39 pct to 710.50 .
The FTSE/Xinhua China A 50 Index was down 231.73 points or 2.53 pct at 8,911.05 and the FTSE/Xinhua China A 200 Index fell 164.71 points or 2.40 pct to 6,685.51.
(1 usd = 6.86 yuan)
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