China's main stock index ended a nine-day rising streak in record turnover on
Friday, causing some to think a long-awaited pull-back was starting after
spectacular gains in recent weeks.
But with the market awash in new money and mutual funds continuing to attract
huge amounts of fresh subscriptions, analysts said any fall was unlikely to be
The Shanghai Composite Index ended down 0.36 percent at 3,518.267
points, after setting an all-time high of 3,563.856 earlier in the day. Losers
outnumbered gainers by 523 to 336.
Investors watch stock movements at a stock exchange in
Chengdu, in China's southwest Sichuan province on Friday, April 13, 2007.
Chinese stocks fell Friday as investors sold to lock in profits from a
nine-day winning streak amid mounting concern over a stream of pending
initial public offerings. [AP]
Turnover in Shanghai A shares hit a record 165.6 billion yuan ($21.5 billion), up
from 147.8 billion yuan on Thursday and the previous record of 155.6 billion
yuan on Wednesday.
"Investors have been growing increasingly worried about the continued gains
so this correction is quite natural, but I don't expect it to last long as it is
still a bullish market," said Li Wenhui, analyst at Huatai Securities.
The index is up 22 percent from the end of February, and this week reached
the 3,500 point level, which many investors had seen as a target.
securities regulator said late on Thursday that it would review next Monday an
application by Bank of Communications for its Shanghai IPO, which could raise as
much as US$3.5 billion if it is priced in line with the bank's H shares.
Money is so ample that the market should be able to absorb this IPO, as well
as CITIC Bank's IPO next week, without trouble, analysts said.
But the large size of the offers could siphon some funds from other
heavyweight bank stocks -- and the market has climbed so fast that any
unexpected negative news, such as lukewarm demand for an IPO or a poor
performance on listing, could hurt sentiment, some traders said.
"Investors want to cash in after recent gains, especially in the metals
sector," said Zhang Qi, analyst at Haitong Securities.
Copper plays, which had surged in the previous two days, fell on Friday after
Shanghai copper and zinc futures dropped around three percent following a failed
attempt to drive London copper above $8,000 a tonne. Jiangxi Copper fell 2.71 percent to 24.37 yuan.
Many banks were weak with Industrial & Commercial Bank of China , the most heavily weighted stock, sinking 1.98
percent to 5.45 yuan.
Among other key blue chips, Baoshan Iron and Steel dropped 2.62 percent to
10.79 yuan as investors locked in profits after this week's surge on the back of
a strong first-quarter earnings estimate.
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