Shenzhen's B-share index inched up 0.03 percent to end at 197.42 points, after falling 0.88 percent in early trade. Shanghai's inched down 0.17 percent to 121.401 points. Hard-currency B shares are available to Chinese and foreign investors.

After the market closed yesterday, Shao Rui, a senior analyst at Shanghai Securities, said: "Late today, some retail investors bought shares that had been oversold in the prolonged market slump over the past 19 months.

"Some institutional investors, mainly brokerages, bought companies in which they had large holdings to dress up their books as the end of the year is approaching."

Analysts said some crude-oil producers were also favoured, after global oil prices shot to their highest level since January 2001 yesterday due to a freeze in oil supplies from strike-bound Venezuela and the growing threat of a war with Iraq.

The domestic A shares of the Sinopec Zhongyuan Petroleum Co closed up 2.64 percent at 9.72 yuan (US$1.12), having rising 7.40 per cent since December 11.

Another Shenzhen-listed oil producer, the Sinopec Taishan Petroleum Co, ended up 2.67 percent at 9.61 yuan (US$1.16), up 7.37 percent from December 11.

Both outperformed the Shanghai A-share index, which nudged up 0.05 percent to 1,495.209 points, and the Shenzhen A-share index, which ended up 0.15 percent at 433.52 points yesterday.

Domestic A shares are for Chinese investors and select foreign institutional investors.

Shanghai-listed Forever Bicycle was yesterday's biggest B share gainer, rising 2.36 per cent to 56.5 US cents.

The stock started a technical rebound on November 27 after it had fallen 37.2 percent since July 9 - underperforming the underlying index, which was down 27.7 percent during that period.

Brokers said the stock had done poorly because of weak company earnings. The bike maker posted heavy losses from 1998 to 2000 and eked out a small profit of 3.9 million yuan (US$471,200) in 2001.

The Chinese mainland's share prices have been battered this year by poor company earnings, a crackdown on irregularities that has unveiled many corporate scandals, and frequent share offerings.

Analyst Lu Xinwen of Merchants Securities said: "Many brokerages have made heavy losses this year due to the market slump. They need to push up the share prices of companies in which they have large holdings to make books look better by the year's end."

Analysts said they expected share indices to move narrowly towards the end of this year.

Analyst Zhang Qi of Haitong Securities said: "Investor confidence has not recovered from lingering market weakness, but bargain-hunting will prevent further losses.

"We expect the benchmark Shanghai composite index to move narrowly between 1,400 and 1,450 points ahead of the new year."

The composite index, which groups B shares and A shares, inched up 0.04 percent to end at 1,430.827 points.

The turnover on the Shanghai market ended at 4.68 billion yuan (US$566 million) and Shenzhen's closed at 3.15 billion yuan (US$380 million).

(China Daily December 25, 2002)