Indices inch downward despite bargain-hunting
( 2003-09-05 09:32) (China Daily)
China's shares ended lower yesterday after a mild rebound in the morning fizzled out, although bargain-hunting helped prop up poor performers such as mid-sized carrier Shandong Airlines.
The benchmark Shanghai composite index, grouping hard-currency B shares for foreigners and yuan-denominated A shares, inched down 0.03 per cent to 1,447.425 points.
Shandong Airlines Co Ltd's B shares were the biggest gainers in Shenzhen with a 1.72 per cent rise to HK$2.96 (US$0.38). The company posted a first-half net loss, blaming the outbreak of SARS that kept potential travellers at home.
But investors bet the airline would recoup losses in the second half amid anticipated growth in traffic, brokers said. Its B shares have slid about 18 per cent so far this year.
Analysts said bargain-hunting was insufficient to boost the entire market amid persistently bearish sentiment.
The Shanghai composite index has shed 6 per cent over the past seven weeks, battered by negative factors from an over-abundance of stock offers to a tightening of bank lending.
"Weak sentiment drove investors to take quick profits," said analyst Luo Xiaoming at Ping An Securities. "When it comes to shares, today's winners are likely to be tomorrow's biggest losers."
Harbin Fenghua Aerospace Hi-tech Co was the biggest decliner on the southern market of Shenzhen, falling 3.68 per cent to 14.40 yuan (US$1.7). Its A shares had soared 7.4 per cent to end at 14.95 yuan (US$1.8) on Wednesday.
Analysts said the Shanghai composite index was expected to move narrowly in the near term, finding support at the 1,425-point level and resistance at 1,500.
The Shanghai B-share index fell 0.56 per cent to 101.943 points, while its Shenzhen counterpart was 0.51 per cent lower at 227.71.
On the foreign exchange market, China's yuan ended two notches weaker versus the US dollar at 8.2770 yesterday, but still at the stronger end of its managed trading range.
The yuan moves in a band between 8.2760 and 8.2800 enforced by the central bank.
Turnover rose to US$640 million from US$550 million on Wednesday.
The yuan firmed to 7.0841 against 100 Japanese yen from 7.1264, but softened versus the euro to 8.9607 from 8.9296.
In the futures market, Shanghai copper futures closed up yesterday after the London Metal Exchange (LME) broke through resistance at US$1,800, boosting sentiment on the Chinese market, traders said.
The most active January futures contract jumped 150 yuan (US$18) to 18,230 yuan (US$2,203) a ton, while most others ended up 150 to 190 yuan (US$18-23). Combined volume surged to a heavy 95,418 lots from 41,750 lots on Wednesday.
"The steep rise in London led to brisk trade in Shanghai as more long-position holders jumped into the market," a trader said. "Many investors now expect more gains in the near term."
LME three-month copper ended up US$25 at US$1,812 a ton in Wednesday's trade, with fund-buying the main driver. The contract held steady in Asian trade yesterday.
Shanghai's spot copper rose 220 yuan (US$26.60) to trade in a range of 18,090 yuan (US$2,185) to 18,150 yuan (US$2,192) yesterday, tracking futures.
Most Shanghai aluminium futures ended up 10 to 50 yuan (US$1.20-6) yesterday, while combined volume stayed lacklustre at 9,812 lots, although that was up from Wednesday's 6,892 lots.
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