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Mainland stocks finish at odds, profit reports carry bank stocks higher

By Yu Xi  (Global Times)

08:32, August 20, 2012

Mainland markets ended with mixed results Friday after a strong performance from the heavily weighted banking sector pushed the Shanghai Composite Index into the black for the day, while the Shenzhen Component Index took a dive on continued concerns about the slowing domestic economy.

The Shanghai Composite closed trading at 2,114.89 points Friday after tacking on 2.69 points, or 0.13 percent. Meanwhile, the Shenzhen Component ended last week at 8,883.60 points after declining 89.78 points, or 1.00 percent Friday.

Both indices started last week on a down note following the release of weak July trade data. Soft import and export figures continued to weigh on the indices into Tuesday, along with earning concerns from several of the country's top brokerages. Huge drops in securities and insurance stocks Wednesday dealt another blow to investor confidence. Mainland indices ended near even Thursday due to widespread ambivalence about the market's prospects after Premier Wen Jiabao announced that the current challenges facing China's economy would persist for some time longer.

The Shanghai Composite Index ended with a slight win Friday after several banks reported huge surges in their first-half earnings. Shanghai Pudong Development Bank Co advanced 0.27 percent to 7.55 yuan ($1.19) Friday after it announced that its net profits in the first six months shot up 33.49 percent year-on-year. Ping An Bank jumped 1.01 percent to 15.06 yuan on the day after claiming a 43 percent year-on-year surge in its first half profits.

As of Friday, 1,003 companies listed on both the Shanghai and Shenzhen stock exchanges had reported a combined 180.21 billion yuan in net profits in their first-half financial reports, up 6.75 percent year-on-year, according to the China Securities Journal Saturday.

But even as listed companies continue to record gains, the markets remain clouded by dismal sentiment, say analysts. There is still room for mainland indices to fall further this week and investors shouldn't enter the market blindly, Gui Haoming, chief analyst at Shenyin & Wanguo Securities cautioned, according to a report by the China Business News Sunday.

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