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China's shares fell slightly Monday, as investors cashed short-term profits after last week's rally which was triggered by hopes that official market-boosting steps would emerge from a key Communist Party meeting, brokers said.
The benchmark Shanghai composite index, grouping hard-currency B shares for foreigners and yuan-denominated A shares, closed down 0.31 percent at 1,399.66 points. The Shenzhen index lost 18.06 points, or 0.56 percent, to end at 3181.50.
The index had bounced up 2.5 percent on Friday, on hopes of policy support as party leaders met from October 11 to 14 to brainstorm on issues such as how to breathe new life into the state sector and resuscitate a moribund stock market.
"Investors were disappointed when no signs of policy support appeared over the weekend, and that made them take quick profits today," said analyst Song Huisong at Fujian Xingye Securities.
Hongyuan Securities Co Ltd <000562.SZ>, which recently offered nearly 100 million additional A shares, was one of Monday's worst performers and most actively traded counters, ending down 3.4 percent at 7.14 yuan (86.3 US cents).
The Shanghai composite index has shed 14.2 percent since mid-April versus a 39.4 percent rally in neighbouring Hong Kong over the period, but was hit by negative factors from a rash of stock offers to a tightening of bank loans.
Analysts said they expected the market to remain weak over the near term, although share prices might gain a boost if the party gathering yielded strong market-supportive policies.
"Few investors are expected to trade seriously due to recent weak conditions, so we expect the Shanghai composite index to continue to fall in the near term and search for a bottom," said analyst Zhong Jingteng at Pingan Securities.
Some analysts said they believed the index could test a year's low of 1,311.684 points, set on January 6, within weeks.
Despite market weakness, some shares listed on both local and Hong Kong bourses closed up as the H-share index that tracks Hong Kong-listed mainland firms surged towards a six-year high and domestic counters raced to catch up, brokers said.
China's largest polyester maker, Yizheng Chemical Co Ltd <600871.SS> <1033.HK>, was one of Monday's star performers, jumping 4.38 percent to 5.0 yuan (60.5 US cents).
On the furthers market, nearly all Shanghai copper futures contracts closed up their daily 3 percent limit in heavy trade yesterday, spurred on by a surprise surge on the London Metal Exchange in Asian trade, traders said.
Shanghai's most active February 2004 futures jumped 560 yuan (US$67.7) to finish at the contract's record high of 19,440 yuan (US$2,349) a ton, while other contracts ended up 540-590 yuan (US$65.3-71.3).
Combined volume soared to a rare 174,876 lots, more than four times the 42,760 lots on Friday.
LME three-month copper surged to US$1,911/US$1,914 a ton in Monday's Asian trade, having closed at US$1,883 in Friday's session, buoyed by news that the world's third-largest copper reserve would shut for two weeks because of a fatal landslide.
China's yuan ended two notches stronger versus the US dollar at 8.2768 on Monday, at the stronger end of its managed trading range.
(China Daily October 14, 2003)
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