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Stocks down a third day despite bank rebound

(Xinhua)
Updated: 2008-09-19 09:26

Chinese stocks slid for a third day in a row on Thursday, closing 1.72 percent lower but well above the day's lows, as most issues in the heavy-weight banking sector rebounded from heavy losses.

The benchmark Shanghai Composite Index plummeted 5.84 percent to close the morning session at 1,816.44 points. It recovered on rebounding bank shares in the afternoon to end the day at 1,895.84 points, down 33.21 points, or 1.72 percent.

The Shenzhen Component Index closed at 6,563.07 points, down 116.99 points, or 1.75 percent.

Losers outnumbered gainers by 802 to 132 in Shanghai with 108 issues unchanged. The Shenzhen market saw 656 gains and 99 losses, with 41 unchanged.

Aggregate turnover was 63.1 billion yuan ($9.28 billion).

Heavy-weights led the early drop, with investors losing confidence as the extent of Chinese banks' exposure to the failed US investment bank Lehman Brothers emerged, analysts said.

China Railway Group sank by the daily limit of 10 percent to 4.55 yuan, and China Ping An fell 8.64 percent to 30.66 yuan. Kweichow Maotai slid 5.74 percent to 120.82 yuan.

Bank shares rebounded after two days' decline, amid market talk that the government would further relax its fiscal policy, analysts said.

Bank of Beijing rose 4.79 percent to 7 yuan and Industrial Bank rose 4.06 percent to 14.37 yuan. Bank of Ningbo was up 6.7 percent to 6.85 yuan.

The Industrial and Commercial Bank of China, however, lagged the sector and edged up just 0.58 percent to 3.44 yuan. It announced its mainland and overseas branches held $151.8 million in bonds of, or related to, Lehman Brothers.

Metal shares bucked the trend, with Shandong Gold-Mining rising by the daily limit of 10 percent to close at 30.69 yuan and Inner Mongolia Baotou Steel Rare-Earth Hi-Tech gaining 9.95 percent to 9.06 yuan.