Market edges down on economy fears

Chinese stocks fell in heavy trade yesterday, led by financials, as some investors worried that upcoming economic data could stall the market's two-week rebound.

The benchmark Shanghai Composite Index closed 0.73 percent lower at 3733.503 points, after touching a low of 3680.99 in the morning.

Turnover in Shanghai A shares was heavy at 147.9 billion yuan against Monday's 147.1 billion yuan.

"Many investors are waiting for April's economic data to be released next week to decide whether the rally is sustainable or not," said Gao Lingzhi, strategist at Great Wall Securities.

"If inflation eases, or economic growth remains robust, the market will gain momentum to rise further."

The market was also weighed down by expectations for more shares becoming tradable as their lock-up periods expire in May.

The Shanghai Securities News reported 284.1 billion yuan worth of such shares would be freed up this month, up from 150 billion yuan in April though in line with the monthly average for this year.

Airlines fell sharply after global oil prices hit a fresh record high on Monday, and after a rumor about possible merger activity in the industry was denied.

China Eastern Airlines dropped 4.16 percent to 11.3 yuan after the Shanghai Securities News quoted an official at the carrier as saying there would be no progress toward a tie-up with Singapore Airlines before the Olympics.

But gold miners continued to rise as the precious metal extended gains in overseas futures markets. Shandong Gold surged 6.5 percent to 139.41 yuan and Zhongjin Gold gained 6.79 percent to 69.99 yuan, after both soared 10 percent on Monday.

Hong Kong stocks up

Hong Kong blue chips edged up in sluggish trade yesterday, led by heavily weighted Hutchison Whampoa and China Mobile, which offset pressure from airline and oil refinery stocks as oil prices stuck near record levels.

The benchmark Hang Seng Index closed up 0.3 percent, or 78.18 points, at 26262.13, led by a 3.32 percent gain in ports-to-telecoms conglomerate Hutchison and a 1.41 percent rise in China Mobile.

Despite softer mainland stock markets, the China Enterprises Index of Hong Kong-listed mainland companies, or H shares, edged up 0.18 percent, or 26.01 points, to end at 14651.29.

Mainboard turnover fell to HK$69.74 billion from HK$74.03 billion on Monday.

Agencies

(China Daily 05/07/2008 page15)