Big players trigger Shanghai slide

By Cao Qian and Pan Xiaoyi  |   2008-7-23  |     NEWSPAPER EDITION

SHANGHAI stocks closed slightly lower yesterday as big companies, including oil refiners, banks and insurers, tumbled.

The benchmark Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B shares, retreated 15.30 points, or 0.53 percent, to 2846.12 after reaching an intraday high of 2,868.62. Gainers outnumbered losers 460 to 380 while 38 remained unchanged. Turnover in the local market fell to 66.37 billion yuan (US$9.7 billion), compared with 71.62 billion yuan on Monday.

"Many companies suffered declining profits as the economy has been growing at a slower pace with some posting losses in the first half," said Zhang Fan, an analyst with Tebon Securities Co Ltd. "The stock market is still under great pressure from lackluster global sentiment as well as tight monetary policy at home."

PetroChina Co and China Petroleum & Chemical Corp, or Sinopec, failed to extend their gains after the oil futures rose to US$131 per barrel in NYMEX on Monday, ending their two day rallies.

The two companies posted a combined loss of 5.71 billion yuan in their refining units in the first six months of the year due to surging oil prices.

PetroChina, the market's biggest component and the country's largest oil producer, shed 1.24 percent to 15.19 yuan while Sinopec, Asia's biggest oil refiner, plunged 2.13 percent to 11.01 yuan.

Major insurers and lenders also declined.

China Life Insurance Co Ltd, the country's largest insurer, dropped 2.15 percent to 26.34 yuan. Bank of Communications retreated 1.79 percent to 8.22 yuan and China Construction Bank fell 1 percent to 5.95 yuan.

Bucking the trend, major securities shares and Shanghai-based companies advanced.

Guoyuan Securities Co Ltd soared 9.99 percent to 18.93 yuan while Northeast Securities Co Ltd jumped 9.56 percent to 23.27 yuan.

Shanghai Jielong Industry Corp Ltd, one of the country's leading packaging and printing firms, rose 9.99 percent to 13.21 yuan and Shanghai Shentong Metro Co Ltd, a rail transport operator, also rose by the daily ceiling to 8.48 yuan.