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Insurers take losses in up day for local stocks

By Yu Xi  (Global Times)

08:55, August 08, 2012

Markets in Shanghai and Shenzhen recorded marginal gains Tuesday, carrying Monday's rally into a second day.

The Shanghai Composite Index climbed 2.70 points, or 0.13 percent, to close at 2,157.62; while the Shenzhen Component Index edged up 0.19 percent, or 17.06 points, to finish at 9,229.27.

Both indices swung up sharply in the early morning session thanks to strong performances from the gold, media, textile and rare earth sectors. Drops in insurance and banking stocks forced the indices to give up some of their early momentum as both markets closed out the day only slightly north of even.

Insurance, securities, cement, electric power and banking stocks led the market in terms of losses Tuesday.

The heavily weighted insurance sector took a dive Tuesday due to earnings concerns from one of the industry's biggest players. China Life Insurance Co issued a warning that its net profits had declined sharply in the first half of this year compared to the same time in 2011 due to a drop in investment returns. This news pushed the company's stock down 1.80 percent to 18.52 yuan ($2.91). Some analysts argue that the time is ripe to invest in insurance stocks, which are likely to rebound in the future, according to a report by Guotai Junan Securities Tuesday.

Despite the weeks' gains, without more policy support or signs of recovery in the world economy to revive sentiment, the markets have little chance of prolonging their rebound over the near term, say analysts.

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