Chinese stocks end mixed on concerns
Brief rally fizzles as investors grow worried about a string of initial public offerings
Shanghai : Chinese stocks ended mixed yesterday on concerns about new share sales that drained market liquidity.
The benchmark Shanghai Composite Index slipped 12.06 points, or 0.4 per cent, to close at 3,141.35, ending the week up by 0.9 per cent. The Shenzhen Composite Index for China's second exchange edged up 0.2 per cent to 1,168.17.
A brief two-day rally fizzled as investors were worried about a string of initial public offerings that will divert capital from existing equities, analysts said.
Eight companies were listed yesterday on China's new board for smaller shares.
"The regulators didn't slow down the pace for issuing new shares, while the market is facing a lot of pressure on capital drain at the end of the year," said Zhou Yu, an analyst for Pacific Securities in Beijing.
Market capital flow usually falls short in December, when companies are closing their books.
Nonferrous metals retreated after strong performances in the previous session, with Jiangxi Copper, the country's biggest metal producer, off 1.6 per cent to 37.98 yuan, and Aluminum Corp. of China down 1.1 per cent to 14.09 yuan.
Industrial and Commercial Bank of China, China's biggest commercial lender, declined by 0.4 per cent to 5.14 yuan. Bank of China lost 1 per cent to 4.12 yuan, while China Construction Bank Ltd. shed 0.5 per cent to 5.82 yuan.
Medical shares jumped after the commerce minister, Chen Deming, said Thursday that the government will encourage more foreign investment in the industry next year.
Zhejiang CONBA Pharmaceutical, an herbal medicine maker, surged 6.9 per cent to 11.75 yuan, while Kunming Pharmaceutical Corp. gained 4.3 per cent to 10.97 yuan.
