By Ding Qi (chinadaily.com.cn)
Updated: 2007-08-16 16:49

Blue-chips led the correction Thursday in the Chinese stock market as the major Shanghai index lost over 2 percent, hammered by shocks in neighboring markets.

The benchmark Shanghai Composite Index opened at 4,845.02 points, 25 points lower than Wednesday's close and continued to decline rapidly in the morning session. After hitting the day's lowest of 4710.31 points, bargain hunters bought up shares hoping for a major recover like Wednesday's. However, the index failed to return and after a brief bounce to the 4,800-point level, it lost ground again to close at 4765.45, shedding 104 points or 2.14 percent. Turnover of the market reached 129.8 billion yuan.

Shanghai Composite Index Source:www.sina.com.cn

The Shenzhen Component Index, covering the smaller Shenzhen market, also closed lower at 16053.15 points, down 269 points or 1.65 percent with a trading value of 75.9 billion yuan.

In spite of heavy losses, there were a surprising number of gainers in both markets today. Of all the stocks traded, 788 stocks went up, while 142 remained flat and only 543 went down. Divergence between the heavily weighted stocks and those with less market value led to the unique scene.

Shenzhen Component Index Source:www.sina.com.cn

Blue-chips failed to sustain the market after notable gains in past weeks. Shares of Sinopec ended down 3.43 percent and closed at 14.9 yuan. Baoshan Iron & Steel, China’s leading steel maker, declined 4.08 percent to 15.29 yuan per share.

Banking sectors also began a major correction. China Merchants Bank declined by 3.45 percent. Bank of Communications lost 0.65 yuan to 12.62 yuan per share.

In contrast, sections not performing well previously began to catch up with gainers. The chemical fiber industry, for example, contributed decent gains due to anticipation of a price hike for fiber products. Shanghai Lianhua Fibre Corp led the section with a 10-percent rally.

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