China stocks hit six-week closing low

Chinese stocks slipped 0.61 percent on Thursday in thin trade to a fresh six-week closing low as blue chips remained soft on looming expiries of lock-up periods for shares and a bleak outlook for corporate earnings. The Shanghai Composite Index, which traded narrowly in the morning session on Christmas Day, closed at 1,852.419 points after hitting its lowest level in six-weeks at 1,832.355.
It has lost 5.86 percent over three days earlier this week. Losing Shanghai A shares outnumbered gainers by 531 to 362. Turnover in Shanghai A shares shrank to the week's low of 42.1 billion yuan ($6.2 billion) from Wednesday's 48.2 billion yuan. China Pacific Insurance Group, the country's third-largest insurer, sagged 1.87 percent to 10.48 yuan, as around 1.58 billion of its shares became tradeable on Thursday.
Local media reported that as of December 24, around 562 firms had published their earnings forecasts for 2008, with at least 14 percent predicting a fall in profit and about 23 percent of firms forecasting losses. "Trade seems dull around the holiday, with the index undergoing a consolidation phase, but the weak trend appears to be intact," said Zhou Lin, analyst at Huatai Securities.
But some analysts said that after sharp falls this week, some investors might resume bargain hunting, betting on a small rebound in the equities market before the end of the year. Bank shares remained sluggish after slipping earlier this week on disappointment over the central bank's small rate cut. Investors had hoped for larger cuts in interest rates to help prop up consumer spending as the economy falters. Industrial & Commercial Bank of China, the country's largest bank, was flat at 3.63 yuan while Industrial Bank slipped 1.51 percent to 15.00 yuan.
Property shares weakened, with China Vanke, the country's leading listed property developer, losing 1.03 percent to 6.70 yuan. But steel shares outperformed led by Baoshan Iron and Steel, the listed unit of China's largest steelmaker, rising 1.03 percent to 4.90 yuan after official media reported that it raised its prices for key steel products for February from the prior month, halting a five-month slide in prices.
Shares of home appliances soared as local media reported the government would adopt more supportive steps to boost consumption of such goods in rural area. Hefei Meiling and Wuxi Little Swan shot up by their 10 percent daily limit.