SHANGHAI (XFN-ASIA) - China A-shares finished the morning session broadly lower following a sharply weaker Wall Street on worries that financial institutions have yet to see the end of losses from the credit crisis.
Investors also moved to the sidelines to await measures from Beijing to boost the economy and the stock markets.
Airlines and oil refiners fell after crude oil prices rose.
China Life Insurance (SHA 601628; HK 2628) fell 1.55 pct to 24.85 yuan after reporting that its first half profit fell 32 pct to 15.84 bln yuan, largely as a result of investment losses.
The benchmark Shanghai Composite Index ended the morning down 48.27 points or 2.0 pct at 2,365.11.
The Dow Jones industrial average fell 2.08 pct, erasing a gain of about 200 points seen Friday.
'Our fragile A-share market was influenced by weakness in the overseas markets, 'said Zhang Gang, an analyst with Southwest Securities, 'Investors are still cautious as they have not seen any substantial moves from the government yet.'
In addition, Zhang said funds invested illegally could leave the market following a report that the authorities are preparing penalties of up to 10 years for insider trading.
There is also talk that the government may cut the bank reserve ratio to boost the economy. Wu Dazhong, an analyst with Shenyin & Wanguo Securities noted that it is possible for the government to loosen policy to ease the financing difficulties faced by many companies. However, Wu does not see the changes coming soon.
China Minsheng Banking (SHA 600016) rose 0.34 pct to 5.91 yuan. It announced that first half net profit rose 114 pct year-on-year to 6.04 bln yuan.
Bank of Beijing (SHA 601169) fell 1.55 pct to 9.52 yuan. It reported first half net profit growth of 121.4 pct.
China CITIC Bank (SHA 601998; HK 0998) rose 4.49 pct to 5.59 yuan, off a high of 5.89 yuan on rumors that regulators rejected a plan by investor Warren Buffet to take a 500 mln usd stake in the bank. Sentiment was boosted despite the failure of the deal because, if the rumors are true, this suggests China CITIC Bank meets Buffett's stringent stock-picking criteria.
Buffett told CBNC last week about an aborted China investment, but did not identify the stock.
China Petroleum & Chemical Corp (Sinopec) (SHA 600028; HK 0386; NYSE SNP) fell 0.79 pct to 10.05 yuan and PetroChina (SHA 601857; HK 0857), the biggest composite index component, fell 1.84 pct to 13.36 yuan.
China Southern Airlines (SHA 600029; HK 1055; ADR ZNH) tumbled 5.75 pct to 5.25 yuan.
Light, sweet crude rose 52 cents to settle at 115.11 usd per barrel on the New York Mercantile Exchange.
China Railway Construction Corp (SHA 601186; HK 1186) lost 1.79 pct to 9.31 yuan. Its first half net profit rose 22.11 pct year-on-year to 1.52 bln yuan under Chinese accounting standards.
China Unicom (SHA 600050 HK 0762) declined 1.57 pct to 5.01 yuan after rising as much as 5.18 yuan after reporting first half net profit growth of 103 pct to 4.42 bln yuan.
The Shanghai A-share Index was down 50.52 or 1.99 pct at 2,482.91, while the Shenzhen A-share Index fell 21.39 points or 3.03 pct to 684.69.
The FTSE/Xinhua China A 50 Index was down 92.08 points or 1.02 pct at 8,920.03 and the FTSE/Xinhua China A 200 Index fell 118.20 points or 1.76 pct to 6,598.94.
(1 usd = 6.85 yuan)
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