Turnover shrank drastically on the Shanghai Stock Exchange as shares continued to lose momentum again yesterday.

The Shanghai Composite Index, which covers yuan-denominated A shares and hard currency B shares, dipped 0.83 percent to end at 4,836.17 after reaching an intraday high of 4,905.49.

Turnover in the local market tumbled to 65.73 billion yuan (US$8.88 billion) from 102.65 billion yuan on Monday. Losers outnumbered gainers 535 to 277 while 88 stocks remained unchanged.

"The downward trend is likely to continue and a deeper correction is possible," said Zhang Li, an analyst with Huatai Securities Co.

Banks and real estate developers, which tumbled on Monday amid tighter macroeconomic measures, continued to be weak.

Industrial & Commercial Bank of China Ltd, the country's biggest listed lender, added 0.4 percent to 7.70 yuan. China Construction Bank Corp, the nation's second-largest, rose one percent to 9.52 yuan and China Merchants Bank dipped 0.22 percent to 36.23 yuan.

China Vanke Co, the nation's largest listed property developer, gained 0.55 percent to 27.25 yuan. Poly Real Estate Group Co shed 0.11 percent to 56.79 yuan and Gemdale Corp edged down 0.83 percent to 38.08 yuan.

Other major blue chips also declined, including PetroChina Co, the nation's biggest oil company, which lost 2.5 percent to 29.24 yuan. China Petroleum & Chemical Corporation, or Sinopec, fell 2.96 percent to 20.99 yuan. Suning Appliance Co, China's second-biggest home appliance retailer, tumbled 3.6 percent to 65.88 yuan while Kweichow Moutai Co, a fiery liquor maker, slumped 4.7 percent to 200.99 yuan.

"A wait-and-see attitude is now prevalent among investors as no clear sign of rebound could be seen," Zhang said.

Industry experts suggest investors might be better off applying for initial public offerings which are safer.

(Shanghai Daily December 19, 2007)