SHANGHAI (XFN-ASIA) - China A-shares ended the morning session mixed, with
PetroChina helping to drag down the Shanghai market, dealers said.
The benchmark Shanghai Composite Index ended the morning down 41.70 points
or 1.10 pct at 3,762.36.
PetroChina (SHA 601857), the biggest index component, tumbled 4.25 pct to
20.97 yuan, extending a more than 3 pct fall yesterday after it announced weak
2007 results.
"PetroChina's continued plunge severely hit investor confidence, dragging
down other large caps such as banks," said Cao Xuefeng, an analyst at West China
Securities.
Uncertainty ahead of Taiwan's presidential election and referendum on UN
membership on Saturday also weighed on sentiment, Cao said.
China Petroleum & Chemical Corp (Sinopec) (SHA 600028; HK 0386; NYSE SNP),
the country's largest refiner, lost 2.40 pct to 13.82 yuan.
Shenzhen Development Bank (SZA 000001) shed 3.48 pct to 27.99 yuan, while
Industrial Bank (SHA 601166) lost 3.15 pct to 34.78 yuan. China Merchants Bank
(SHA 600036) was down 2.06 pct at 30.01.
Steelmakers continued to rise sharply.
China's top steel producer Baoshan Iron & Steel (SHA 600019) rose 2.90 pct
to 14.55 yuan. Wuhan Iron & Steel (SHA 600005) added 2.17 pct to 16.92 yuan,
while Liuzhou Iron & Steel (SHA 601003) gained 5.79 pct to 15.72.
SGIS Songshan (SZA 000717), a unit of Shaoguan Iron & Steel Group, rose by
the 10 pct daily limit to 9.44 yuan.
Analysts said the steel sector is benefiting from news of industry
consolidation and price hikes by leading producers.
Yesterday, the National Development and Reform Commission, China's economic
planner, said it has given permission for Baosteel Group, the parent of Baoshan
Iron & Steel (SHA 600019) to take over Guangzhou Iron & Steel Group and Shaoguan
Iron & Steel Group.
Wuhan Iron & Steel Group, the parent firm of Wuhan Iron & Steel (SHA
600005), also won approval to buy into rival Liuzhou Iron & Steel (SHA 601003).
Meanwhile, Baosteel and Wuhan Iron & Steel were given the go-ahead to build
a steel mill each with annual production capacity of 10 mln tons.
Baosteel has also confirmed that that it will raise prices on certain steel
products in May.
The Shanghai A-share Index fell 44.03 points to 3,948.38, while the Shenzhen
A-share Index was up 5.43 points at 1,222.61.
The FTSE/Xinhua China A 50 Index was down 64.00 points at 14,401.32 and the
FTSE/Xinhua China A 200 Index fell 16.72 points to 11,135.01.
(1 usd = 7.1 yuan)
allen.shu@xfn.com
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xfnals/xfntm
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