SHANGHAI (XFN-ASIA) - China A-shares closed sharply lower as fund mangers
cut positions in large caps such as PetroChina amid redemption pressure, dealers
said.
PetroChina (SHA 601857; HK 0857), the biggest index component, was down 5.71
pct at 19.83 yuan, dropping below 20 yuan for the first time.
The benchmark Shanghai Composite Index closed down 170.39 points or 4.49 pct
at 3,626.19, the biggest one-day percentage loss since Jan 29.
Turnover fell to 88.54 bln yuan from 96.41 in the previous session.
The index opened nearly 1 pct higher as investors welcomed the outcome of
Taiwan's presidential election, but it quickly changed direction as large caps
came under pressure.
Opposition candidate Ma Ying-jeou won a landslide victory in Taiwan's
presidential election over the weekend after pledging to improve economic ties
with the mainland.
"The gain was not sustainable because institutional investors continued to
cut positions in banks and PetroChina," said Chen Huiqin, an analyst at Huatai
Securities.
She said redemption pressure has been building due to the weak market over
the past few weeks.
Although the securities regulator continued to approve stock fund products
over the weekend, investors were also disappointed that the government has not
announced new policies to support the market.
"Large shareholders dumped their shares in PetroChina or Ping An after the
lock-up periods related to the initial public offering expired," said Wang Sai,
an analyst at Wanguo Consulting.
Ping An Insurance (Group) (SHA 601318; HK 2318) plunged 9.81 pct to 50.56
yuan, while Shanghai Pudong Development Bank (SHA 600000) fell by the 10 pct
daily trading limit to 30.85 yuan.
Industrial Bank (SHA 601166) lost 9.37 pct to 31.83 yuan, and Huaxia Bank
(SHA 600015) shed 8.18 pct to 13.02.
Fujian-based companies which rose significantly in early trade after the
Taiwan election outcome came off their highs.
Property developer Fujian Sanmu Group (SZA 000632) rose 4.35 pct to 7.67
yuan, while Fujian Cement (SHA 600802) slipped 1.59 pct to 11.74.
The Shanghai A-share Index was down 179.50 points or 4.51 pct at 3,804.83
and the Shenzhen A-share Index was down 40.43 points or 3.28 pct at 1,193.83.
The FTSE/Xinhua China A 50 Index was down 736.35 points at 13,807.21 and the
FTSE/Xinhua China A 200 Index was down 505.85 points at 10,749.34.
(1 usd = 7.1 yuan)
lilian.wu@xfn.com
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xfnlw/xfntm
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