Index ends string of losses, but investors remain cautious

By Lydia Chen  |   2008-7-2  |     ONLINE EDITION

SHANGHAI'S key stock index ended four days of losses but investors remained cautious even though the state news agency said the country's stock markets will be "stable and healthy."

The Shanghai Composite Index was almost unchanged, gaining 0.12 points to 2,651.73 at 3pm.

Gainers in the Shanghai market outnumbered losers 673 to 132 while 12 were unchanged.

The index has dropped 49.7 percent this year as of yesterday's close, making it the worst-performing stock market in the world.

The Shenzhen Composite Index, which tracks the smaller domestic stock exchange, was up 1.06 percent, or 8.22 points, to 784.89.

PetroChina, the biggest heavyweight and the country's largest oil producer, increased 0.97 percent to 14.61 yuan (US$2.12). Sinopec, the country's largest oil refiner, lost 0.51 percent to 9.69 yuan. Industrial & Commercial Bank of China, the second biggest stock by market capitalization, lost 1.66 percent to 4.73 yuan.

A healthy market shouldn't be "overly dependent'' on short-term policies, Xinhua news Agency said yesterday, indicating last year's stock boom and the recent slump were "irrational." China's economic situation is "better" than expected even though growth may slow, Xinhua said, without elaborating.

The regulator has enforced a set of measures to show that they are dedicated to creating a good environment for the stock market's development, it said, referring to the enhancement of listed company supervisions and investor protections.

Investors should be "clear-headed'' and realize that stock markets have ups and downs and that is the way the market works, just like the laws of nature, it added.

Gansu Jiu Steel Group Hongxing Iron & Steel Co climbed 2.23 percent to 9.16 yuan today.