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Chinese shares slightly down with holiday recess approaching

(Xinhua)
Updated: 2009-01-21 15:43

Chinese share prices closed 0.46 percent lower on Wednesday as the Spring Festival holiday recess came closer.

The Shanghai Composite Index lost 0.46 percent to 1,985. The Shenzhen Component Index was down 0.71 percent to 6,970.

Related readings:  Chinese brokers' profits decline in 2008  Survey: Investor sentiment index for China rises in Q4 of 2008  China's IPO capital drops about 80%  Market mayhem has hidden jewels

Combined turnover rose to 106.39 billion yuan ($15.2 billion) from 85.15 billion yuan on the previous trading day.

Domestic bourses will be closed from Jan 24 to Feb 1 for the traditional Spring Festival holiday.

Investors were worried that continued troubles in the global financial sector and bleak economic data would add to uncertainties in the country's economy, said a Guangfa Securities report released Wednesday.

The National Bureau of Statistics is scheduled to announce economic data including the GDP and CPI (consumer price index) of the fourth quarter and the whole year of 2008 on Thursday.

Li Huiyong, a Shenyin & Wanguo Securities analyst, said the economy might have reached the bottom in December 2008 calculated on the monthly power consumption data and the Purchasing Managers Index. He estimated the quarterly GDP might hit a 36-quarter low at about 6 percent.

Investors were still looking forward to more government stimulus plans as Premier Wen Jiabao on Monday called for more steps in the first quarter this year to reverse the trend of economic slowdown as soon as possible and realize a good start for the whole of 2009, he added.

Textile companies rose on expectation of an industrial stimulus scheme. HuaFang Textile Co rose by the daily limit of 10 percent to 3.3 yuan. Zhejiang Golden Eagle Co was up 8.2 percent to 4.09 yuan.

Banks remained strong on news of state-backed share purchases of the country's top three lenders. Bank of Beijing rose 2.45 percent to 10.46 yuan. Bank of Communications climbed 1.26 percent to 5.63 yuan.

Military technology industries also rose after the government revealed its defense expenditure figures over the past 30 years for the first time in a white paper Tuesday. China North Optical-Electrical Technology Co rose 9.98 percent to 26 yuan. China Spacesat Co went up 8.83 percent to 20.34 yuan.

Globally, Barack Obama became US president on Tuesday with a message of hope and resolve that has so far failed to convince investors. US markets posted a record Inauguration Day drop after institutional money managers State Street Corp and Bank of New York Mellon Corp reported substantial losses on investments and sharply lower profits.

Other Asian markets dropped tracking US market losses. Japan's Nikkei average slid 2 percent to a seven-week closing low. Singapore's main index fell 1.9 percent. Major indexes in Hong Kong and Australia fell 1-2 percent each.