Chinese shares closed lower for the sixth straight session yesterday, venturing into oversold territory after investors cashed in profits on auto stocks such as Chang'an Automobile, brokers said.
Shanghai's B-share index fell 0.74 percent to 114.239 points, while Shenzhen's slipped 1.46 percent to 217.41. Hard currency B shares are open to foreign and domestic investors.
The benchmark Shanghai composite index, grouping yuan-denominated A and B shares, closed down 1.18 percent at 1,511.365 after falling every day last week.
The index is down about 3.5 percent since last Monday and now yields a reading of about 26 on the 14-day Relative Strength Index, indicating it is slightly oversold.
"Fewer people came into our trading offices today after a whole week's fall. That signifies weak sentiment," said Zhou Fengwu, an analyst at domestic brokerage Orient Securities.
Top minivan maker Chongqing Chang'an Automobile was one of the biggest decliners. Its B shares slid 6.54 percent to HK$6.14 (US$0.787) while its A shares fell 7.68 percent to 16.22 yuan.
Changan's A shares had risen more than 100 percent this year while its B shares were up more than 70 percent this year.
Light-truck maker Jianglin Motor Co was the second biggest B share decliner in Shenzhen with a 5.26 percent drop to HK$4.86 (US$0.623) after gaining more than 35 percent since the start of the year.
Also losing ground were shares in chronic loss-makers such as chicken breeder Dajiang Group with the interim corporate reporting season approaching. The half-year reporting season begins July 1 and ends August 31.
Dajiang was the biggest B share decliner and most active stock in Shanghai, falling 3.3 percent to US$0.322 with 2.3 million shares changing hands.
Yuan-denominated A shares in Hualian Commerce dropped six percent to 6.45 yuan. The Beijing-based retailer warned of a first-half loss over the weekend, blaming the outbreak of SARS.
Shanghai's A-share index fell 1.19 percent to 1,582.432 points while its Shenzhen counterpart slipped 1.29 percent to 438.18.
China's yuan ended slightly weaker versus the dollar at 8.2773 yesterday, still strong within its managed trading band with dollars abundant on the market, dealers said.
The yuan moved narrowly between 8.2771 and 8.2774 on moderate turnover of US$530 million, up from Friday's US$430 million.
Over the past two years, the yuan has moved near the firm end of a thin range of 8.2760 to 8.2800 that the central People's Bank of China enforces, buoyed by strong trade surpluses. The yuan is not fully convertible under the capital account.
Dealers said they expected that trend to continue over the near term.
In the futures market, Shanghai copper futures closed slightly lower in paltry volumes yesterday as investors kept to the sidelines while seeking clearer leads from the London Metal Exchange, traders said.
The most active November 2003 contract lost 80 yuan (US$9.6) to 17,540 yuan (US$2,119) per ton, while other contracts ended 40 yuan (US$4.8) to 90 yuan (US$10.8) lower. Combined volume dwindled to only 27,242 lots from an already tiny 32,846 lots on Friday.
(China Daily June 24, 2003)
