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China shares end 3.7% lower on profit-taking

(Xinhua)
Updated: 2008-11-24 16:09

BEIJING  -- China's benchmark stock index finished 3.67 percent lower on Monday, declining for a third straight day after an expected lending rate cut failed to materialize over the weekend.

Related readings:  Asian stock markets drop amid Citgroup jitters

The key Shanghai Composite Index opened 0.42 percent lower before briefly entering positive territory minutes into the morning trade. But weak buying interest and profit-taking drove it to close 72.33 points lower at 1,897.06.

The smaller Shenzhen Component Index dropped 245.15 points, or 3.65 percent, to 6,466.19.

Losers outnumbered gainers by 764 to 101 in Shanghai and by 638 to 92 in Shenzhen. Combined turnover fell to 79.8 billion yuan from Friday's 121.4 billion yuan.

On Friday, the Shanghai index tumbled as much as 4.6 percent before the expectation of a sharp interest rate cut over the weekend helped pare losses to 0.72 percent.

The sell-off came after the expected rate cut failed to happen, Guosen Securities said in a research note on Monday. The market would be volatile in the short term, but there was a good chance it could extend rebound in the coming week.

The government's fiscal stimulus measures and easing of monetary policy could help improve economic fundamentals and boost liquidity that are key to a market rebound, it added.

Property and financial stocks led the decline. China Merchants Property Development Co. tumbled by the 10-percent daily limit to 13.75 yuan after announcing it would sell 450 million additional shares.

China Vanke, the country's largest publicly traded real estate firm, slid 7.23 percent to 6.42 yuan. Shanghai Lujiazui Finance and Trade Zone Development Co. fell 10 percent to 15.27 yuan.

Haitong Securities plunged by the daily limit for the second straight day after its 1.29 billion shares become tradable after lock-up period expired on Friday. Citic Securities lost 4.73 percent to 18.93 yuan.

The Industrial and Commercial Bank of China retreated 2.22 percent to 3.96 yuan and the Bank of China slipped 3.29 percent to 3.23 yuan. Shanghai Pudong Development Bank slumped 6.48 yuan to 13.27 yuan.

Airlines were also heavy losers. Air China, the country's largest international carrier, fell 9.7 percent to 3.91 yuan after it announced its losses in the value of fuel hedging contracts jumped to 3.1 billion yuan (454 million U.S. dollars) by the end of October.

China Southern Airlines dropped 8.74 percent to 3.34 yuan and China Eastern Airlines dropped 8.88 percent to 4 yuan.