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Equities decline led by consumer firms

(China Daily/Agencies)
Updated: 2009-12-17 08:02

Mainland stocks dropped for a second day, led by consumer companies and commodity producers, as investors speculated new share sales will divert funds from existing equities and metals prices declined.

Suning Appliance Co fell 2.5 percent to 19.55 yuan after getting approval for a stock placement. Aluminum Corp of China Ltd, the nation's biggest maker of the lightweight metal, lost 1.9 percent to 15.86 yuan and Jiangxi Copper Co slid 1.4 percent to 41.2 yuan.

China Shipbuilding Industry Co rose 12 percent from its offer price to 8.3 yuan on its first day of trading, Shanghai's second-worst debut this year.

The Shanghai Composite Index fell 19.25, or 0.6 percent, to close at 3,255.21 after changing direction at least 10 times. The CSI 300 Index lost 0.6 percent to 3560.72.

"The market won't come back until the pace of new share sales has eased," said Zhao Zifeng, who helps oversee about $10.2 billion at China International Fund Management Co in Shanghai. "As usual, we are facing tight liquidity towards the year-end as banks and companies withdraw cash to turn paper profit into a real one."

Investors may subscribe to more than 1 trillion yuan worth of shares in 10 initial public offerings this week, the China Business News said on Dec 14.

China's newly opened accounts for stock trading dropped 6.3 percent last week to 377,840, according to the nation's clearing house.

Hang Seng falls

Hong Kong stocks fell, erasing gains, as banks dropped after the mainland's banking regulator said lenders would face risks from bad loans for a "long period of time".

China Construction Bank Corp slid 2.1 percent to HK$6.56, and Bank of China Ltd declined 1.4 percent to HK$4.1.

The Hang Seng Index slipped 0.9 percent to close at 21,611.74, after rising as much as 0.4 percent. The Hang Seng China Enterprises Index declined 1.4 percent to 12,691.43.