Shanghai dips as Hong Kong plunges 2.4%

Most stocks on the mainland market rose yesterday, though financial and property shares led the main index down in sync with sharp falls in Hong Kong's market.

The Shanghai Composite Index ended 0.98 percent lower at 5443.791 points, breaking a four-day rising streak.

Turnover in Shanghai A shares stayed heavy at 151 billion yuan, up from Monday's 141.6 billion yuan.

The Industrial and Commercial Bank of China fell 2.05 percent to 8.12 yuan yesterday, while Ping An Insurance slid 4.02 percent to 105.04 yuan.

PetroChina, the biggest stock, lost 1.14 percent to 30.26 yuan.

Insurance shares were particularly hard hit after it was reported that banking and insurance regulators would sign an agreement this week to let banks invest in insurance firms.

"Though the details are unclear, this means the insurance industry will face more competition as banks may invest in some mid-sized insurers," said Zhou Lin, an analyst at Huatai Securities.

Bank of Communications may buy a stake in Shanghai-based China Life-CMG Insurance Co, a 50-50 venture between Commonwealth Bank of Australia and China Life Insurance, Reuters reported, citing sources close to BoCom.

CITIC Bank rose only 1.13 percent to 10.72 yuan after estimating on Monday that net profit more than doubled last year. Analysts said the result had been expected.

More losses

Hong Kong blue chips slid to their lowest close since September yesterday, their fourth straight session of losses, as investors offloaded stocks across the board before earnings reports by US banks this week.

Bellwether and global bank HSBC Holdings plc sank to 27-month lows and Hong Kong Exchanges and Clearing Ltd, a barometer of market sentiment, fell sharply for a fourth straight trading day.

Shipping plays, particularly dry bulk shippers, suffered large losses after the Baltic Dry Index, an indicator for commodity-freight rates, marked a three-day losing streak.

Hong Kong opened on solid footing, then saw a brief spell of panic selling before the midday break. The blue-chip Hang Seng Index ended near the day's lows, closing down 2.4 percent, or 630.35 points, at 25837.78.

The China Enterprises Index of H shares fell 3.1 percent, or 480.20 points, to 14999.90.

Mainboard turnover was a heavy HK$121.1 billion, up from Monday's HK$109.7 billion.

Agencies

(China Daily 01/16/2008 page15)