Shanghai's key stock index fell the most in nearly a month today as investors ended seven-straight trading days of gains.

 

The Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B shares, dropped 0.98 percent, or 54.11 points, to close at 5,443.79 at 3pm today.

 

Winners in the Shanghai market outnumbered losers 470 to 312 and 68 were unchanged.

 

The Shenzhen Composite Index, which covers the smaller mainland stock market, inched up 0.39 percent, or 6.1 points, to 1,576.50.

 

Banks and property developers performed poorly despite the yuan hitting a new high against the US dollar today.

 

China Vanke, the nation's biggest real estate developer, shed 3.14 percent, or 0.98 yuan (11 US cents), to 30.25 yuan while Guangzhou-based Poly Real Estate Group tumbled 6.21 percent, or 4.97 yuan, to 75.03 yuan.

 

Industrial Bank, partly owned by Hong Kong's Hang Seng Bank Co, declined 4.57 percent, or 2.80 yuan, to 58.46 yuan. Industrial and Commercial Bank of China, the nation's biggest lender, fell 2.05 percent, or 0.17 yuan, to 8.12 yuan.

 

But China Citic Bank Corp gained 1.13 percent, or 0.12 yuan, to 10.72 yuan. The bank said its net income last year may have more than doubled from a year earlier, boosted by faster income growth from fees and interest.

 

The yuan rose to its highest since a US dollar link ended more than two years ago as US Treasury Undersecretary David McCormick called on China for a faster currency appreciation to help narrow the two nations' trade gap.

 

After a speech yesterday at the University of California in San Diego, McCormick referred to a 14 percent gain in the yuan since July 2005 as "some progress."

 

The yuan rose 0.1 percent to 7.2446 against the dollar as of 10:25 am today in Shanghai from 7.2516 yesterday.

 

Brokerages were also among the decliners today.

 

Citic Securities Co, the nation's biggest brokerage, lost 3.66 percent, or 3.57 yuan, to 94.04 yuan. The stock had climbed 4.7 percent in the past two sessions.

 

China's securities regulator will encourage more companies to sell shares on domestic stock markets and increase the proportion of free floats for traded companies, Chairman Shang Fulin said on Saturday at a conference in Beijing.

 

A fall among oil-related shares, which are key heavyweights in the market, also contributed to the loss today.

 

Sinopec, the country's largest oil refiner, skidded 1.84 percent, or 0.43 yuan, to 22.98 yuan while PetroChina, Asia's biggest oil producer, buckled 1.14 percent, or 0.35 yuan, to finish at 30.26 yuan.

 

Steel makers erased morning gains and fell in the afternoon.

 

Baoshan Iron & Steel, China's biggest steel maker, lost 0.82 percent, or 0.16 yuan, to 19.25 yuan. Shanxi Taigang Stainless Steel Co, China's biggest maker of the alloy, dropped 0.95 percent, or 0.26 yuan, to 27.16 yuan.

 

Growth in stainless-steel production may be as fast as 8.6 percent as mills replenish stockpiles, with almost half the 2.5 million-metric-ton increase from China, research group CRU said last Friday. Last year's estimate of one percent growth will be revised in March, CRU said.

 

(Shanghai Daily January 15, 2008)