Chinese index ends flat over weak industrial shares

2007-12-28 00:28:22 Shanghai Daily

SHANGHAI stocks ended lower today, shadowed by weak industrial shares and insurers.

The Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B shares, fell 0.89 percent, or 47.33 points, to close at 5,261.56 at 3pm today. The index was down 124.98 points this week compared to that on Monday when it opened at 5,386.54.

Losers in the Shanghai market outnumbered winners 481 to 280 and 85 were unchanged.

The Shenzhen Composite Index, which covers the smaller mainland stock market, was down 0.44 percent, or 6.45 points, to 1,447.02.

Investors in industrial shares had a gloomy day today.

China Oilfield Services Limited Co lost 4.19 percent, or 1.50 yuan (20 US cents), to finish at 34.34 yuan and PetroChina Co, the nation's biggest oil producer and a key heavyweight in the market, declined 1.37 percent, or 0.43 yuan, to 30.96 yuan.

PetroChina and affiliate China National Oil and Gas Exploration and Development Corp agreed to inject a combined 16 billion yuan to fund the construction of a gas pipeline.

Insurers were also among the losers this morning despite a positive report saying that the country's second-biggest insurer led a group to take a 14 percent stake in a mainland railway project for 16 billion yuan.

Ping An Insurance, China's second-biggest insurer, shed 1.98 percent, or 2.14 yuan, to 106.10 yuan. China Pacific Insurance, the nation's third-largest insurer, buckled 1.71 percent, or 0.86 yuan, to 49.45 yuan.

Ping An Insurance said it's leading a group that's seeking to buy a 14 percent stake in a mainland railway project for 16 billion yuan. The group will become the second-largest shareholder of the project, the insurer said in a statement yesterday. The express railway will link Beijing and Shanghai. Pacific Insurance was also included in the group, it said.

China yesterday set up the Shanghai-Beijing Express Railway Holding Company Ltd to lead construction of the express railway, which will cut the travel time between the cities from 12 hours to five, Xinhua news agency reported.

On the positive side, airline stocks rose on speculation a stronger yuan will further cut the cost of debt payments in foreign currencies.

Air China, the world's biggest airline by market value, gained 1.11 percent, or 0.30 yuan, to 27.44 yuan and China Eastern, the nation's third-largest carrier, jumped 6.77 percent, or 1.35 yuan, to 21.29 yuan.

The yuan rose as much as 0.18 percent to 7.3045 against the US dollar in Shanghai today, the highest since China scrapped a link with the US currency in July 2005. An appreciating local currency cuts the repatriated value of airlines' foreign currency denominated debts.

Some banking and property stocks have also gained on the yuan's appreciation.

Industrial Bank rose 1.05 percent, or 0.54 yuan, to 51.86 yuan. Poly Real Estate Group Co, China's third-largest developer by market value, climbed 2.92 percent, or 1.84 yuan, to 64.82 yuan. A stronger yuan lures foreign money into domestic property investments, raising prices and boosting demand for higher-valued mortgages.