Chinese shares ended down yesterday as profit-taking emerged in "space" stocks after the country launched its first manned spaceship last week, brokers said.

"Trading was extremely dull today, indicating that investor confidence is very weak after the recent slump," said analyst Di Bin at Merchants Securities. "We expect the Shanghai index to continue to fall in the near term to search for a bottom."

The benchmark Shanghai composite index, grouping hard-currency B shares for foreigners and yuan-denominated A shares, closed down 0.81 percent at 1,359.5 points.

Shenzhen's shares lost 0.59 to 3,116.13.

Shanghai's hard currency B-shares buck the trend in the A-share market to gain 0.20 and finish at 103.33. Shenzhen's B-shares rose 4.06 to 253.54.

Investors have sold for a fourth consecutive session stocks that had the word "space" in their names, which had jumped before China put its first man in space, though virtually none had anything to do with the space effort, brokers said.

Mini-bus maker Aerospace Changfeng Co Ltd fell 6.98 percent to 6.53 yuan (US$0.79), while vehicle spare parts maker Harbin Fenghua Aerospace Hi-tech Co Ltd dropped 6.89 percent to 9.59 yuan (US$1.16). Tour agency China Spacesat Technology Co Ltd fell 5 percent to 9.89 yuan (US$1.19).

Yesterday's weakness extended the recent steep fall. The market has been battered by factors from a rash of stock offers to a tightening of bank loans, analysts said.

The Shanghai index has slid 16.67 percent since mid-April versus a 42.26 percent rally in neighbouring Hong Kong.

Some analysts said they expected the index to test the year's low of 1,311.684 points set on January 6.

Leading Chinese minivan maker Chongqing Changan Automobile Co Ltd bucked the market weakness and its B shares were yesterday's most actively traded and one of the biggest gainers, closing up 4.39 percent at HK$8.33 (US$1.07).

US auto giant Ford Motor Co said on Friday it would expand production at the joint venture automobile company to 150,000 units from 20,000.

On the forex market, China's yuan ended one notch weaker versus the US dollar at 8.2767, at the stronger end of its managed trading range.

The one-year non-deliverable dollar forward discount versus the yuan was at 3,100 points by 0830 GMT yesterday, implying a rate of 7.968 yuan per dollar in 12 months' time.

NDFs are a transaction where a forward price is agreed between a customer and a bank, but settlement on the value date is undertaken entirely in US dollars.

Turnover increased to US$960 million yesterday from US$920 million on Friday.

The yuan softened to 7.5759 against 100 Japanese yen from 7.5296 and weakened versus the euro to 9.6418 from Friday's 9.5880.

On the futures market, Shanghai copper futures closed up in line with a rise on the London Metal Exchange, starting the week with strong gains.

Shanghai's most active March 2004 futures added 300 yuan to end at 20,670 yuan (US$2,497) a ton after having hit the contract's record high of 20,720 yuan (US$2,496) in intraday business.

The contract rose a combined 1,440 yuan, or a strong 7.6 percent, between Monday and Friday last week despite a moderate correction on Wednesday.

"We reckon that metal markets are currently entering an uncertain phase, seeking out the next trend," said a Shanghai trader.

"People are becoming increasingly aware of the breakaway upward spiral in base metal prices, particularly because there are still a few metals being overbought, indicating the possibility of more corrections in the short-term," he said.

Other contracts increased by a significant 230 to 550 yuan as combined market volume reached a hefty 184,928 lots, up from 128,392 lots on Friday.

(China Daily October 21, 2003)