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Stocks witness minor technical rebound
( 2003-11-12 09:13) (China Daily)

China's shares managed a minor technical rebound yesterday as investors bought large-capitalized companies such as oil giant Sinopec Corp, but sentiment remained cautious after a several-month-long market slump, brokers said.

The benchmark Shanghai composite index, grouping hard-currency B shares for foreigners and yuan-denominated A shares, finished 0.26 per cent higher at 1,343.616 points.

The Shenzhen sub-index also gained 10.95 points, or 0.34 per cent to finish at 3227.58 points yesterday.

Sinopec Corp, the largest firm in terms of capitalization on the mainland bourses, was one of the most actively traded stocks, ending up 1.29 per cent at 3.93 yuan a share.

The stock has risen 30.56 per cent since the start of 2003 as investors bet on a boom in the domestic petrochemical industry.

Despite yesterday's rebound, the Shanghai index has shed 17.6 per cent since mid-April, battered by factors including an overloaded stock offer pipeline and a tightening of bank loans, which has thinned market funds.

Analysts said the index was likely to fall in the near term to test its lowest level for 2003 at 1,311.684 points, set on January 6.

"The market rose thanks to buying in large caps in the last few minutes of trading," said analyst Yang Weidong at MF Securities. "The rise did not mean a reverse of recent weakness on the market."

Chinese punters had more typically speculated in loss makers as they bet on government-sponsored asset restructurings leading to dramatic changes in the performance of such companies.

Yesterday, Xinjiang Hops Co Ltd bucked the market rise to close down its 10 per cent daily limit for the seventh straight session at 7.97 yuan (96 US cents) after its chairman vanished, leaving it wallowing in debt.

The brewery has been trying to locate Aikelamu Aishayoufu, one of China's most powerful businessmen, since the end of October, executives said, in reference to the latest scandal to ensnare the country's embattled tycoons.

It announced yesterday that authorities had frozen all of the stock held by its largest shareholder, Xinjiang Hengyuan Investment, owned by the ethnic Uygur tycoon, who had mortgaged that stake to the Urumqi branch of the China Construction Bank.

Most Shanghai copper futures bounced back from intra-day lows yesterday following Monday's dip on the London Metal Exchange, but they still ended the day down, traders said.

Shanghai's most active May contract fell 100 yuan to 21,290 yuan (US$2,572), while most other contracts finished down between 10 and 100 yuan. Volume dropped to 274,022 lots from Monday's 338,434 lots.

"The market failed to maintain any momentum after Monday's close, so long-position holders trimmed their positions by selling," one trader said.

Despite Shanghai copper prices weakening further yesterday, LME copper did not appear to follow suit as it lifted from its Monday kerb close in Asian trade.

LME three-month copper was quoted at US$2,053/2,058 a ton by 0356 GMT in Asian trade, up US$13 from Monday's kerb close.

Shanghai's spot copper gained 90 to 100 yuan to move in a range between 21,070 yuan (US$2,548) and 21,150 yuan (US$2,557) a ton yesterday.

Most of Shanghai's aluminium futures ended down 40 yuan (US$4.80) to 140 yuan (US$17) yesterday as volume fell by almost half to 24,520 lots from 42,114 on Monday.

LME aluminium was quoted at US$1,499/US$1,503 a ton in yesterday's Asian trade, up US$2 from Monday's kerb close.

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