SHANGHAI (XFN-ASIA) - A-shares in Shanghai and Shenzhen closed lower on follow-through selling with drug manufacturers and real estate developers weighed down, dealers said.
The Shanghai A-share Index fell 24.05 points or 1.46 pct to 1,626.17 on turnover of 12.70 bln yuan and the Shenzhen A-share Index was down 7.84 points or 1.95 pct at 394.53 on turnover of 7.0 bln yuan.
'The market was hit by follow-through selling in the absence of good news, as investors increasingly chose to cash out first while waiting to see if regulators would do something about recent weakness,' said Liu Jingde, an analyst at Beijing Securities.
Analysts said the government should come up with more measures to ease widespread concerns over liquidity pressure.
'Regulators should work on more ways to introduce money to the market, in an attempt to help offset liquidity worries due to an increasing number of IPOs to be issued,' said Zhu Haibin, an analyst at Everbright Securities.
Drug makers were under pressure due to sharp falls in Shandong Lukang Pharmaceutical Co Ltd (SHA 600789) after it said it canceled a plan to launch share reforms.
Shandong Lukang Pharmaceutical fell its 10 pct daily limit to 4.28 yuan.
Jinling Pharmaceutical Co Ltd (SZA 000919) slipped 0.31 yuan or 7.21 pct to 3.99 and Hubei Guangji Pharmaceutical Co Ltd (SZA 000952) tumbled 0.15 or 5.15 pct to 2.76.
Property developers were weighed down by a report that China will introduce further macroeconomic controls for the real estate market and seek to resolve housing shortages facing low-income earners.
Celebrities Real Estate Development Group Co Ltd (SZA 000667) fell 0.30 yuan or 6.01 pct to 4.69 and Shanghai New Huang Pu Real Estate Co Ltd (SHA 600638) slid 0.30 or 6.56 pct to 4.27.
Shanghai Jinqiao Export Processing Zone Development Co Ltd (SHA 600639; SHB 900911) lost 0.31 yuan or 4.44 pct to 6.67.
China Vanke Co Ltd (SZA 000002; SZB 200002) fell 0.18 yuan or 3.17 pct to 5.50 after it signed a deal to acquire stakes in units of Shanghai Midway Infrastructure (Holdings) Ltd for a total of 1.77 bln yuan.
Shanxi Taigang Stainless Steel Co Ltd (SZA 000825) lost 0.10 yuan or 2.04 pct to 4.79. The company rejected a report that it plans to sell a stake to South Korean steelmaker POSCO.
Metal stocks saw bargain-hunting interest after recent falls, with Yunnan Chihong Zinc & Germanium Co Ltd (SHA 600497) adding 2.02 yuan or 6.05 pct to 35.43.
Yunnan Copper Industry Co Ltd (SZA 000878) rose 0.32 yuan or 3.32 pct to 9.97 and Jiaozuo Wanfang Aluminum Manufacturing Co Ltd (SZA 000612) closed up 0.20 or 3.45 pct at 6.0.
But Shandong Aluminium Industry Co Ltd (SHA 600205) fell 1.10 yuan or 7.43 pct to 13.71 after it said it has cut the price of metallurgical alumina by 13.27 pct to 4,900 yuan per ton.
Tsinghua Tongfang Co Ltd (SHA 600100) added 0.05 yuan or 0.58 pct to 8.64 after announcing a net profit of 84.62 mln yuan for the first half, up 15 pct from a year earlier.
Baoshan Iron & Steel Co Ltd (SHA 600019) closed down 0.01 yuan or 0.25 pct at 4.03 after a media officer with Chongqing Steel told XFN-Asia that Chongqing Iron & Steel Group Ltd is not in talks to merge with China's largest steelmaker Shanghai Baosteel Group Corp, parent of Baoshan Iron & Steel.
The benchmark Shanghai Composite Index, which covers both A- and B-shares listed on the Shanghai Stock Exchange, closed down 22.71 points, or 1.45 pct, at 1,547.44.
Turnover fell to 12.76 bln yuan from 14.40 bln in the previous session.
The index moved between 1,541.41 and 1,570.05.
The FTSE/Xinhua China A 50 Index was down 57.44 points at 4,756.84. The FTSE/Xinhua China A 200 Index lost 42.76 points to 3,540.51 and the FTSE/Xinhua China A 600 Index down 50.26 points at 3,147.28.
(1 usd = 8.00 yuan)
lake.xu@xinhuafinance.com
© 2006 AFX News
