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Chinese stocks continue decline

By Wang Jiamei (Global Times)

10:59, August 31, 2012

Chinese mainland stock markets extended their recent slide into Thursday to close at lows not seen in more than three years, although heavily weighted financial stocks helped keep the losses in check to a certain extent.

The benchmark Shanghai Composite Index slipped 0.65 point, or 0.03 percent, to close at 2,052.59; while the Shenzhen Component Index lost 50.83 points, or 0.61 percent, to finish at 8,220.08.

A rally in the weighted insurance, brokerage and oil sectors at the start of the morning session pushed the Shanghai Composite up to its five-day average before the market drifted back into negative territory by the noon break. In the afternoon, the benchmark continued to step down and bottomed out at an intra-day low of 2,032.54 points, the lowest level since February 2009, although a rebound in financial and oil stocks helped the index climb out of its earlier hole and end near even.

The shipping sector was Thursday's biggest drag after two of China's leading shippers posted sizable losses for the first half. The shippers in question, China COSCO Holding Co and China Shipping Container Lines Co, sank 1.24 percent and 2.29 percent respectively on the day to close at 3.98 yuan ($0.63) and 2.13 yuan.

Brokerages outperformed the market after the official launch of a pilot refinancing program which will allow 11 participating securities companies to borrow capital from China Securities Finance Corporation to upgrade their margin trading services starting from Thursday. Sinolink Securities Co surged to the daily limit to 11.87 yuan; Western Securities Co jumped 5.86 percent to 13.01 yuan; and Soochow Securities Co increased 4.06 percent to 7.17 yuan.

Insurance companies also helped offset some of the market's losses due to news that New China Life Insurance Co reported a 7.3 percent rise in its net profit during the first half. The insurer's stock gained 3.39 percent to 25.61 yuan.

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