Yangtze Power helps Chinese shares recoup losses

China's shares closed almost unchanged on Monday as buying in index heavyweight Yangtze Power late in the session helped the key index recoup most of the morning's losses. The benchmark Shanghai composite index, grouping foreign-currency B shares and local-currency A shares, nudged down 0.07 percent to end at 1,304.229 points. It had fallen 0.6 percent by midday.
Yangtze Power Co Ltd, which oversees the giant hydropower Three Gorges Dam project, was the day's second-most active stock.
Its yuan-denominated A shares, open to select foreign investors, closed up 1.1 percent at 9.21 yuan after having outperformed the market over the past three weeks due to strong third-quarter earnings.
"Late buying in Yangtze Power helped the market recover," said He Bin at Xiangcai Securities. "But a lack of follow-through buying due to poor sentiment kept trade in the doldrums."
The key index has fallen 27 percent since early April, when credit curbs and other measures to cool a racing economy took hold. In the latest tightening step, the central People's Bank of China raised interest rates for the first time in nine years.
"Sentiment is weak after the recent slump," said Zhou Fengwu at Orient Securities. "But the market has little potential to fall sharply again due to official support."
Beijing has recently taken a slew of steps to support depressed stock markets and many more are in the pipeline, industry sources and analysts say. In the latest, regulators published on Friday rules that widened the scope for brokerages to use stocks as collateral to obtain bank loans.
Analysts said they expected the index to move in a tight range this week as investors awaited fresh market-moving news.
Large caps, which have borne the brunt of the slump due to fears their earnings growth would be hurt by economic-cooling steps, posted a mixed performance on Monday.
Shanghai Automotive Co Ltd, owner of a fifth of General Motors Corp's flagship car plant, slid 1.6 percent to 5.65 yuan. It had posted a disappointing 23 percent fall in third-quarter earnings last month.
Bellwether China United Telecommunications Corp, the smaller of the country's two wireless operators, was the day's most active stock. It closed unchanged at 2.92 yuan.