Blue feeling as stocks tumble 1.9% - ResearchInChina
Date:2008-06-05
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SHANGHAI'S stocks fell 1.93 percent yesterday, led by blue chips and a further erosion in investors' confidence.
The benchmark Shanghai Composite Index lost 66.49 points to end at 3,369.91. The index touched an intraday high of 3,428.47 and an intraday low of 3,341.74.
Losers outnumbered gainers 617 to 182 while 54 were unchanged. Transactions dropped to 59.2 billion yuan (US$8.5 billion) from 69.3 billion yuan on Tuesday. The Shenzhen Composite Index, which tracks the nation's smaller bourse, dropped 1.28 percent to end at 1,021.36.
"There is a large number of hesitant investors in the market who are not sure about the outlook for inflation and the prospects of the merger between two telecommunications companies," said Zhao Yuanhui, a Donghai Securities Co analyst.
China Unicom Ltd, which would merge with China Netcom Group Corp, saw its shares drop 8.86 percent and end at 8.74 yuan yesterday.
"The integration between the two companies is not that easy. It involves the consolidation of hardware facilities as well as human capital in the firms" said Dong Cheng, an analyst with the Beijing Shoufang Investment Management Co.
"It may need time to figure out whether the merger plan is practical enough to boost the competitiveness of China's telecommunications industry."
Big-cap banking shares continued to be weak. Shares of Industrial & Commercial Bank of China Ltd lost 1.52 percent to 5.82 yuan. China Construction Bank Ltd fell 1.84 percent to 6.95 yuan.
Among energy and resources shares, Baoshan Iron & Steel Co, the nation's largest steel maker, declined 1.89 percent to 11.95 yuan and Aluminum Corp of China, the country's largest producer of the metal, fell 3.12 percent to 18.60 yuan.
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