Shanghai's hard currency B-share index slid 0.51 percent to 116.822, while Shenzhen's fell 0.57 percent to 192.73.

Automation Instrumentation was Shanghai's star performer, climbing nearly 5 percent to 7.85 yuan (95 US cents) after the firm said it would swing back into the black this year.

Kondarl was Shenzhen's second-biggest A-share gainer, jumping its daily limit of 5 percent to 5.02 yuan (61 US cents).

Both are yuan-denominated A shares, now available to select foreign investors.

China Bicycle extended its rally for a third day after announcing on Tuesday it was likely to reverse five years of losses in 2002. It ended the session 5.3 percent higher at 5.22 yuan (63 US cents).

Analysts said the benchmark index will now hover around the psychological support of 1,400 points in the near term, waiting for clearer direction.

"The market is fluctuating within a 15- to 16-point range, trying to establish support at 1,400 and waiting for news," said analyst Xu Menghui at Guotai Junan Securities.

Punters also focused on technology counters such as market heavyweight Beijing UFSoft Co, a software designer which lost ground yesterday after rallying over the past week.

Chinese technology stocks have benefited recently from guarded optimism over the beleaguered global sector in general. UF Soft, one of China's best known names, dropped 3.25 percent to 52.02 yuan (US$6.28) as investors cashed in gains.

Agricultural products producer Jinli Technology was Shanghai's biggest A-share decliner, dropping seven per cent to 13.81 yuan (US$1.67) yesterday.

The benchmark Shanghai composite index, grouping A and B shares, ended 0.68 percent lower at 1404.880 yesterday.

The component A- and B-share index on the Shenzhen market closed 20.09 points or 0.69 percent lower at 2,850.23.

The A-share sub-index dropped 23.52 points or 0.73 percent to 3,159.95.

Several shares with "special treatment (ST)" status dropped sharply after the companies announced that they expect to report net losses for 2002.

Among these, Luoyang Chundu Foodstuff closed 0.29 yuan (4 US cents) lower at 5.51 (67 US cents) on trading of 3 million shares, while Yorkpoint Science & Technology was down 0.23 (3 US cents) at 8.89 yuan (US$1.07) on 243,000 shares, and SDIC Yuanyi Industry was 0.08 (1 US cent) lower at 8.87 (US$1.07) on 1.2 million shares.

However, other "ST" shares gained strongly.

Among these, Sundiro closed 0.19 yuan (2 US cents) higher at 4.02 (49 US cents) on 8.6 million shares.

While there was no clear reason for these gains, analysts said that people may be buying stocks based on hopes the companies will return to profit in the full year, or on hopes that if the firms are delisted, they will be restructured by their local governments.

Shares receive "ST" status after reporting losses for two consecutive years.

Market rules require firms to be delisted after they report net losses for three consecutive years.

Turnover on the Shanghai market was 4.04 billion yuan (US$488 million), while the figure for the Shenzhen market was 2.16 billion yuan (US$260 million).

(China Daily December 6, 2002)