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The country's stocks dropped yesterday with turnover wallowing to levels unseen since late June as hopes for a quick market recovery fade due to a lack of institutional support, traders said.
The Shanghai composite index, tracking A and B shares, lost 12.356 points, or 0.75 percent, to end at 1634.366, and the Shenzhen's also fell 16.23 points, or 0.48 percent, to 3377.36.
The Shanghai B-share index slid 0.585 point, or 0.39 percent to close at 149.837 points, while Shenzhen's ended down 0.33 percent higher at 241.13.
Turnover was meagre at US$4.27 million on the Shanghai's B-share market and HK$29.98 million (US$3.84 million) in Shenzhen.
Hard-currency B shares are available to foreign investors.
"Such tiny turnover can do little to help improve the market because it dampens investors' enthusiasm," said analyst Zhang Guanrong of Jin Xin Securities.
China's stock markets have been falling generally since June 24, when the government scrapped an unpopular scheme to sell down its stakes in listed firms, an issue that had scared off investors worried about a liquidity drain.
Brokers said they expected the market to extend a consolidation in the near term as bearish sentiment persisted.
Investors also shied away from sluggish markets because of the corporate reporting season, which runs until the end of this month, brokers said.
More than 10 percent of the country's 1,200 listed firms have forecast a loss for the first half of the year, blaming mainly cutthroat competition in glutted industries.
Shenzhen Properties, a conglomerate involved in property development, transport and trade, reported a 41 percent drop in profit yesterday.
Its B shares ended down nearly 0.5 percent at HK$4.00 (51 US cents).
In Shanghai, garments maker Matsuoka was among the heaviest B share fallers, slipping 0.67 percent to US$1.49.
It was the second straight fall after the firm reported an 18 percent drop in half-year profit on Wednesday due to weaker exports.
Domestic A shares dipped about 0.70 percent in dull trade.
The yuan ended a touch weaker against the US dollar yesterday as demand for the hard currency from domestic importers picked up slightly, brokers said.
The yuan ended at 8.2768 to a dollar, down two notches from Wednesday's close. Turnover, an active US$520 million on Wednesday, was not immediately available.
"Dollars bids were a bit stronger compared with earlier in the week," said a dealer in Beijing.
Despite the fall, the yuan still managed to trade near the firm 8.2770 level thanks to China's healthy trade surplus of US$15.64 billion for the first seven months.
Trade flow is the key driver for the yuan's value as the currency is fully convertible only on the current account.
Dealers said they expected the yuan to remain solid in the near term, hovering near the strong end of its meagre band of 8.2760 to 8.2800, which the central bank generally enforces.
Officials have said they planned to widen the yuan's band gradually to cope with changes in China's balance of payments after the country became a World Trade Organization member last December, but have given no specifics or a timetable.
The yuan weakened against the Japanese yen to end at 7.0257 for 100 yen from 7.0155 but ended one notch firmer against the Hong Kong dollar at 1.0607.
（China Daily August 16, 2002）
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