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China equities ease on profit-taking, oil price hike

(Xinhua)
Updated: 2008-07-22 20:20

BEIJING - Chinese equities closed lower on Tuesday after failing to sustain the rebound of the previous trading day.

The benchmark Shanghai Composite Index was down 0.53 percent, or 15.3 points, to 2,846.12. The Shenzhen Component Index closed at 9,851.29 points, down 19.7 points, or 0.2 percent.

Combined turnover eased to 98.36 billion yuan (about US$14.25 billion) from 105.57 billion yuan on Monday. Gains outnumbered losses by 460-380 in Shanghai and 361-337 in Shenzhen.

After sentiment was dampened by overnight oil price hikes and Wall Street losses, Sinopec, Asia's top refiner, slumped 2.13 percent to 11.01 yuan and PetroChina was down 1.24 percent to 15.19 yuan.

Property stocks that drove the index up on Monday reversed course and fell on profit-taking. China Vanke, the country's largest listed property developer, eased 1.45 percent to 8.83 yuan, while COFCO Property lost 1.78 percent to 12.66 yuan.

Olympics-themed shares failed to continue their uptrend. The sector was down 0.04 percent on Tuesday, with Beijing Xidan Department Store edging down 0.14 percent to 14.38 yuan.

As the Olympics nears, the market regulator has taken steps to head off any sharp turbulence. The China Securities Regulatory Commission (CSRC) said on Monday it would release monthly data to make sales of non-tradable shares more transparent, in an apparent effort to boost the market.

CSRC statistics show that about 25 billion shares or 29.67 percent of the unlocked non-tradable shares were sold as of June in the past two years. The figures indicate that the impact of such shares was not as negative as some investors feared, said the CSRC.

However, Li Feng, a China Galaxy Securities analyst, disagreed. "The nearly 30 percent rate is too high and we had expected it to be around 10 percent," he said.

Li added that these non-tradable shares remain a shadow over the market as holders would have a stronger motive to sell once the market rises.