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China's shares closed down slightly yesterday as investors, with sentiment poor after an eight-week downwards trend, sold stock in companies which posted disappointing results for the first nine months of this year.
Shanghai's B share index fell 0.29 percent to 129.66 points in thin trade, while Shenzhen's was down 0.66 percent at 199.74.
Turnover on the hard currency B share markets, available to both Chinese and foreign investors, was only US$7.58 million in Shanghai and HK$65.64 million (US$8.41 million) in Shenzhen.
Investors punished companies that posted poor results.
Inner Mongolia Erdos Cashmere Products Co, which yesterday reported a steep drop in third-quarter profits from the same period of 2001, was Shanghai's biggest faller with a 2.35 percent slide to US$0.79.
Despite yesterday's fall, brokers said there was light technical buying which kept the benchmark Shanghai composite index above the key psychological support level of 1,500 points.
The index, grouping B shares and A shares (off-limits to foreigners), edged down 0.08 percent to 1,509.707.
It has fallen nearly 10 percent since September 3, hit by factors such as poor corporate earnings and frequent A share initial public offerings.
"The index kept above the key support level today as technical buying emerged after recent heavy losses," said analyst Luo Xiaoming of Ping'an Securities.
"It seemed the markets had bottomed out," he said.
Analysts said they expected buyers and sellers to wage a see-saw battle around the 1,500-point level in the afternoon and the outcome might offer an indication of direction in the near term.
Reports said China is set to open its domestic investors only A-share market to foreign institutional investors, a move it hopes will boost local stock prices and attract buyers to one of the world's fastest growing economies.
Analysts said they believed foreign buying could lift sentiment in the A-share market and help share prices in the short run.
Chinese securities regulators and mainland firms have launched an ambitious marketing campaign to lure foreign money.
The Chairman of the China Securities Regulatory Commission, Zhou Xiaochuan, briefed institutional investors in Singapore last week on details about the Qualified Foreign Institution Investor (QFII) scheme.
The QFII plan will allow foreign investors to buy yuan-denominated A shares, bonds and convertible bonds listed in China for the first time.
Despite the future plan, analysts said the current weak sentiment was likely to prevent an immediate recovery and the composite index was likely to move narrowly around current levels for now.
Chronic loss maker China Bicycle Co was one of worst performers on the Shenzhen B share market and closed down 2.77 percent at HK$2.46 (31.53 US cents).
Refrigerator and air-conditioner compressor maker Shanghai Highly was another main decliner, ending down 1.09 percent at 72.9 US cents after the company posted a third-quarter loss yesterday, versus a profit in the same period of 2001.
Shanghai's A share index inched down 0.07 percent to 1,577.289 points and its Shenzhen counterpart nudged down 0.03 percent to 464.54.
(China Daily October 31, 2002)
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