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China's shares dipped yesterday as profit taking in companies based in the country's northeast helped end a short-lived technical rebound.
The benchmark Shanghai composite index, grouping hard-currency B shares for foreigners and yuan-denominated A shares, closed down 0.18 percent at 1,369.174 points, hovering around nine-month lows.
Companies based in the northeastern provinces of Jilin, Liaoning and Heilongjiang were among the most active counters.
Jilin Electric Power Co Ltd finished 1.56 percent lower at 5.04 yuan (US$0.6) and Jinbei Automotive Co Ltd slipped 0.97 percent to 7.13 yuan (US$0.86).
The companies had risen sharply since late September after State media said Party leaders, gathering from October 11 to 14 to discuss the economy, would partly focus on policies to revitalize traditional industry based in the Northeast.
"The latest rally was unable to reverse weak market conditions," said Zheng Weigang, an analyst at Shanghai Securities.
"As there are few signs the pace of market expansion would slow, we expect the index to keep falling in the near term," Zheng said.
The Shanghai composite index has shed 16.1 percent since mid-April, while its counterpart in neighbouring Hong Kong has rallied by 37.5 percent over the same period. The Shanghai index has been hit by a slew of negative factors including too many stock offers.
Analysts said they believed the Shanghai index could test a year's low of 1,311.684 points set on January 6 within weeks.
But TCL Communications Equipment Co Ltd bucked market weakness yesterday to climb to its 10 percent daily limit, ending at 20.06 yuan (US$2.4). Investors were buoyed by an initial public offering by its parent, TCL Corp, brokers said.
TCL Corp, China's No 2 TV and cellphone maker, has said it will absorb TCL Comms and debut on the Shenzhen exchange to raise funds for a global branding push. It will allow TCL Comms' existing shareholders to swap shares in the debutante.
On the foreign exchange market, China's yuan ended a notch stronger versus the US dollar at 8.2770 yesterday, at the stronger end of its managed trading range.
The yuan moves in a band of 8.2760 to 8.2800 enforced by the central bank. Turnover rose to US$760 million from US$600 million on Wednesday.
The yuan weakened to 7.5800 against 100 Japanese yen from 7.5505 yesterday and softened versus the euro to 9.7974 from 9.7428.
In the futures market, Shanghai copper futures closed mostly down yesterday after hitting fresh contract highs a day earlier as investors consolidated positions, brokers said.
Shanghai's most active February contract fell 40 yuan (US$4.80) to 18,860 yuan (US$2,278) a ton, while most other contracts ended 20 yuan (US$2.40) higher to 60 yuan (US$7.30) lower. Combined volume dived to 51,890 lots from a heavy 104,150 lots on Wednesday.
"Trade became cautious after yesterday's sharp increase," said a Shanghai-based trader. "But the rally is likely to continue in the near term as the London market is still strong."
LME three-month copper ended up US$15.50 at US$1,869.50 a ton - its highest since December 2000 - at Wednesday's kerb close on the back of fund buying, traders said.
Spot copper in Shanghai rose 110-140 yuan (US$13.30-16.90) to trade in a range of 19,030 yuan (US$2,298) to 19,090 yuan (US$2,306) yesterday.
Aluminium futures finished from 50 yuan (US$6) to 120 yuan (US$14.50) lower, ignoring a strong showing on the London Metal Exchange. Combined volume jumped to an active 15,392 lots from Wednesday's 8,864 lots.
LME aluminium closed up US$11 at US$1,469.50 a ton by Wednesday's kerb trade.
(China Daily October 10, 2003)
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