Chinese shares tumble

Chinese shares closed down 0.67 percent on Thursday, coming off recent five-year highs, as Industrial and Commercial Bank of China's upcoming initial public offering diverted funds.
More than 150 domestic institutions had taken part in a public tender for the Shanghai portion of ICBC's IPO, state media said, and a source told Reuters the offer's Hong Kong portion had already attracted US$100 billion worth of institutional orders.
The benchmark Shanghai composite index finished at 1,778.181 points after it closed at its highest level in more than five years on Wednesday for the second time this week. "The day's fall was also a natural correction after the market had hit repeated highs this week," said analyst Deng Hongguang at Orient Securities.
Turnover in Shanghai A-shares was 27.79 billion yuan ($3.5 billion), up from 25.75 billion yuan on Wednesday. Despite the temporary retreat, analysts said they were optimistic over the near-term trend, due mainly to expectations of an improvement of market transparency and corporate governance as a slew of high-quality companies, such as ICBC, are coming to list on the domestic bourses.
"The index may break the key 1,800 points after ICBC's listing," said Zhou Lin at Huatai Securities.
ICBC, China's largest lender, aims to list in Shanghai and Hong Kong simultaneously in late October after the IPO, which is likely to be the world's largest. On Thursday, index heavyweight Sinopec Corp., Asia's largest refiner, was one of the most active stocks.
It closed down 0.72 percent at 5.48 yuan after it said it would invest 2.99 billion yuan into Hainan Petrochemical Co. Ltd. The property sector continued its recent weakness after last month's dismissal of Shanghai's Communist Party boss Chen Liangyu raised concern that local officials might more strictly enforce measures to cool the real estate market. Property developer Financial Street Holdings Co. Ltd. fell 2.6 percent to 9.72 yuan, while Poly Real Estate Group Co. Ltd. dropped 3.32 percent to 25.33 yuan.