Shanghai market volatile in morning trading

SHANGHAI stocks vacillated this morning after the key index reached the highest level in nearly eight months yesterday.

The key Shanghai Composite Index edged up 0.04 percent to 2,347.39 points by midday with a turnover of 68.5 billion yuan (US$11 billion).

"Blue chips are unlikely to drop sharply in the short term due to their low valuation but some foreign institutions have cashed in recent gains. This may lead to a range-bound market," Wanlian Securities Research Institute said in a report today.

ICBC, China's largest lender, fell among financials after Goldman Sachs pared its holding of Hong Kong-listed shares and sold them at a 3 percent discount yesterday after the shares had surged 46 percent since July.

ICBC shed 0.9 percent to 4.25 yuan. Agricultural Bank of China lost 1 percent to 2.88 yuan. China Construction Bank decreased 0.6 percent to 4.76 yuan.

Kweichow Moutai Co, a leading producer of high-end liquor in China, fell 0.8 percent to 177.07 yuan after the distillery cut this year's revenue target from 50 billion yuan to 41.6 billion yuan.

Brokerages continued a strong run. CITIC Securities, the biggest listed brokerage, rose 3.3 percent to 14.81 yuan. Haitong Securities Co jumped 5.7 percent to 11.64 yuan. China Merchants Securities Co surged 9.6 percent to 12.25 yuan. Founder Securities Co climbed 5.7 percent to 5.74 yuan.

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