China stocks close slightly lower

China's main stock index fell slightly on Wednesday, led by airlines after they reported first-half earnings, while brokerages climbed on fresh rumours that regulators might act to support the market. The Shanghai Composite Index ended down 0.34 percent at 2,342.147 points, off the day's low of 2,310.455. It remains close to a 20-month, intra-day low of 2,284.585 hit last week.
Turnover in Shanghai A shares remained tiny at 32.4 billion yuan ($4.7 billion) against 31.2 billion yuan on Tuesday. Losing stocks in Shanghai outnumbered gainers by 473 to 436. China Eastern Airlines sank 3.47 percent to 4.73 yuan after saying it remained in the red for the first half of this year under international accounting standards, although the loss narrowed.
The top listed securities firm, CITIC Securities, rose 5.30 percent to 18.90 yuan amid fresh rumours that as a step to aid the market, regulators might soon permit the long-delayed launch of trade in stock index futures. But analysts noted that such rumours had repeatedly proved false in the past.
"The room for any rebound looks limited - this is just investors speculating about vague positive rumours," said Wu Nan, analyst at Xiangcai Securities. Many analysts and fund managers see major technical support for the index at 2,245 points, its high in 2001. But with the index down 62 percent from last October's peak, many do not rule out an eventual break of that support.
"The market is quite likely to test 2,245. Falling sectors are rotating rapidly and gaining shares tend not to sustain their rises. There is very little trading interest or investor confidence," said Li Wenhui, analyst at Huatai Securities.
Coal shares were soft after the official China Securities Journal said the National Development and Reform Commission would tighten supervision of coal price caps, though it did not give details. Henan Shen Huo Coal Industry sank 6.62 percent to 25.68 yuan.
CITIC Bank continued to outperform, edging up 0.54 percent to 5.60 yuan in active trade, after it jumped 4.11 percent on Tuesday because of rumours in internet chatrooms that Warren Buffett planned to invest $500 million in the bank. The official Shanghai Securities News on Wednesday quoted the bank as saying the rumours were false. CRBC International shot up its 10 percent daily limit to 5.50 yuan after saying it had won a bid for a 5.48 billion yuan expressway construction project in Chongqing.