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Chinese shares hit 2-month high, give up gains at close

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BEIJING, Feb. 6 (Xinhua) -- Chinese equities lacked support for a rally on Monday after cement makers and coal producers at one point drove up the benchmark Shanghai Composite Index to a two-month high during trading.

The index hit a two-month high of 2,341.58 shortly after trading resumed in the afternoon, but later gave up most gains after several investors sold off their shares.

Profit-taking orders sent the index down by as much as half a percent to 2,317.42 points, with the index closing at 2,331.14, up 0.73 points, or 0.03 percent.

On the smaller Shenzhen Stock Exchange, the Shenzhen Component Index added 0.12 percent, or 11.65 points, to finish at 9,448.64 after fluctuating between an intra-day high of 9,526.79 points and the day's lowest of 9,404.49 points.

Fewer shares changed hands as investors were less aggressive after January's gains. Combined turnover on the two bourses shrank to 128.85 billion yuan (20.42 billion U.S. dollars) from 131.25 billion yuan on the previous trading day.

"The rally in January has put the market under pressure for correction," said Sun Jianbo, chief strategic analyst with Galaxy Securities. "Some equities have seen an increase of 20 or even 40 percent since the start of this year."

The benchmark Shanghai Composite Index has increased by 6 percent since January.

Market heavyweights wavered within narrow ranges. PetroChina, the country's largest oil producer, moved up by one tick to close at 10.23 yuan per share. ICBC, China's biggest bank, was unchanged at 4.41 yuan. CCB, the county's second-largest lender, dipped 0.41 percent to 4.87 yuan. China Shenhua, the country's largest coal company, remained unchanged at 27.35 yuan.

Utility companies led the market's gains. Changchun Gas Co. rose by 10-percent limit to 7.67 yuan.

The cement sector was also strong. Anhui Conch, China's leading cement manufacturer, rose 2.1 percent to 17.07 yuan.

Property developers fell amid reports that real estate brokerage agencies are operating at losses in large cities, with new home prices in Beijing dropping by 25 percent in February.

China Vanke, the country's largest developer by market value, lost 2.18 percent to 7.62 yuan. Poly Real Estate and Gemdale, two other large Chinese real estate firms, fell 3.15 percent and 2.15 percent to 5.23 yuan and 10.45 yuan, respectively.

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