Shanghai's hard currency B share index dropped 2.84 percent to 128.721 points, its lowest closing level since January 28, while Shenzhen's ended down 3.32 percent at 199.13, its lowest close since January 30.

Turnover on the B share markets, open to Chinese and foreign investors, was tiny at US$22 million in Shanghai and HK$66 million (US$8.46 million) in Shenzhen as prolonged market weakness took a toll on trading interest, brokers said.

Analysts said the benchmark Shanghai composite index, grouping B shares and A shares off limits to foreign investors, was in danger of falling below support at 1,500 points.

The index closed at 1,502.716 points yesterday, down 1.16 percent from Friday.

Shenzhen's dipped 1.76 percent to 3009.19 points.

Chronic loss-making chicken breeder Shanghai Dajiang Group Co was the most active counter and one of the top decliners, diving 5.64 percent to US$0.519 on heavy volume of 5.67 million shares.

Dajiang posted a net loss for the third quarter yesterday, after a deep loss in the first half of 2002. It has been in the red since 2000.

"Weak earnings reports depressed share prices further," said Shao Rui, a senior analyst at Shanghai Securities.

"With the benchmark Shanghai composite index now approaching the psychologically important 1,500-point level, we expect some see-saw battles between buyers and sellers in the near term."

The composite index has lost 10.24 percent of its value since September 3, hit by poor earnings, a heavy roster of initial public offerings and a government crackdown on market corruption.

Although analysts expected some technical buying near the 1,500-point support, many predicted it would eventually fell through the level.

"Prolonged market downtrend has made investor sentiment weaker and weaker, it will be difficult for buyers to keep the composite index above 1,500 points," said analyst Chang Jin of Qinghai Securities.

"Judging from the recent steep falls, the 1,500-point level would definitely be breached, the only question left is when," said analyst Wu An of CITIC Securities.

Brokers said Monday's fall was led by B shares, while weak sentiment spilled over to A share markets.

Yuan-denominated A shares in market heavyweight China United Telecommunications Corp, which accounts for nearly 2 percent of Shanghai's A share index, dropped 1.67 percent to 2.94 yuan (35.5 US cents).

The Shanghai A share index ended down 1.13 percent at 1,570.06 points and its Shenzhen counterpart was down 1.48 percent at 461.88.

(China Daily October 29, 2002)