Shanghai's composite index lost 16.530 points, or 1.05 per cent, to 1,551.811 while Shenzhen's sub-index fell 48.34 points, or 1.39 per cent, to 3,440.52.

Shanghai's B share index rose 0.69 per cent to 117.620 points while Shenzhen's edged up 0.02 per cent to 223.05.

"There was speculative buying of cheaper B shares following a recent rally on the Hong Kong market," said analyst Lu Wei of East Asia Securities.

Hong Kong's benchmark Hang Seng Index has risen more than 4 per cent over the past two weeks.

Chicken breeder Shanghai Dajiang Group was the top B share gainer, ending up 4.88 per cent at US$0.344 with 13.9 million shares changing hands.

On the broader market, punters sold power and auto counters such as Jiangling Motors to book profits after a recent rally, analysts said.

Minivan maker Jiangling Motors was the top faller in Shenzhen. Its hard currency B shares slid 3.39 per cent to HK$5.70 (US$0.755) and its yuan-denominated A shares dropped 4.3 per cent to 13.13 yuan (US$1.58). Both types of shares had gained more than 20 per cent since mid-April.

Heilongjiang Power Co was the top B share decliner in Shanghai with a 1.28 per cent drop to US$0.619 after a near 9 per cent rise over past weeks.

Analysts said profit-taking also hit financial counters.

China Merchants Bank, the largest of only four listed domestic lenders, fell 2.2 per cent to 12.22 yuan (US$1.47). Minsheng Banking Corp slipped

3.4 per cent to 11.48 yuan (US$1.38).

Both lenders have risen about 10 per cent since mid-April.

On the foreign exchange market, China's yuan ended one notch weaker at 8.2770 against the US dollar yesterday but was still strong within a government-set trading band because of an abundance of dollars on the market, dealers said.

The yuan moved narrowly between 8.2768 and 8.2771 after closing at 8.2769 on Tuesday, near the firm side of a tiny range of 8.2760 to 8.2800 set by the central People's Bank of China.

Turnover fell to a thin US$380 million from US$460 million.

"Strong dollar supply kept the yuan at a high level around 8.2770 and the trend will continue," a domestic bank dealer said.

The yuan has stayed on the strong side of the government-set range over the past year due to China's trade surplus, which ensured a steady dollar inflow.

It strengthened to 7.0568 to 100 Japanese yen from 7.0810 and edged up against the euro to 9.7919 from 9.7978. It closed three notches higher against the Hong Kong dollar at 1.0609.

Shanghai copper futures climbed yesterday, echoing a solid kerb rise on the London Metal Exchange, traders said.

Shanghai's most active October 2003 futures rose 80 yuan (US$9.6) to 17,470 yuan (US$2,111) a ton. Almost all other contracts ended 50 yuan (US$6) to 100 yuan (US$12) higher. Combined market volume rose to 68,672 lots from Tuesday's moderate 63,292 lots.

"Some buying after the LME kerb rise helped Shanghai prices," said a Chinese trader based in Shanghai. "But the range of gains was small as Shanghai was already stronger yesterday after recent gains on the LME."

LME three-month copper closed at US$1,715, well up from the pre-weekend kerb close of US$1,682.

Most Shanghai aluminum futures closed 10 yuan (US$1.2) to 40 yuan (US$4.8) higher yesterday following gains in London, with volume falling to 12,768 lots from Tuesday's 13,564 lots.

LME aluminum rose US$9.50 to US$1,410 a ton in Tuesday's kerb.

(China Daily May 29, 2003)