Chinese shares drop

Chinese shares closed down 0.38 percent on Friday as real estate developers and banks remained weak amid concerns of possible policy tightening measures, dealers said. The Shanghai Composite Index, which covers both A and B shares, was down 12.06 points at 3,141.35 on turnover of 101.5 billion yuan (14.9 billion dollars).
Analysts said concerns that banks may need to raise funds to boost capital adequacy ratios and a lack of liquidity weighed on stocks. State media reported Monday that Chinese banks would need to raise 500 billion yuan in 2010 to beef up their defences against bad debts after rampant lending this year.
"The shrinking turnover shows investors are cautious and have little interest in trading before market liquidity returns to abundant levels after funds from IPO subscriptions return early next year," Ping An Securities analyst Li Xianming told Dow Jones Newswires.
Banks and property developers led the losses. China Merchants Bank fell 1.7 percent to 16.40 yuan, Industrial and Commercial Bank of China shed 0.39 percent to 5.14 yuan while China Vanke lost 0.6 percent to 13.22 yuan. However, steel makers rose on hopes for further mergers in the sector after China announced plans to consolidate several iron and steel smelters to create one globally competitive company and two or three domestic leaders.
Angang Steel rose 1.0 percent to 15.10 yuan while Shanxi Taigang Stainless Steel ended up 0.2 percent at 8.99 yuan. Most of the 36 stocks listed on the Nasdaq-style ChiNext board fell with eight companies making their debut on Friday. Shanghai Wangsu Science and Technology led the falls, down 6.6 percent to 44.82 yuan.
The Shanghai A-share index shed 12.76 points, or 0.39 percent, to 3,294.71 on turnover of 101.2 billion yuan, while the Shenzhen A-share index rose 2.32 points, or 0.19 percent, to 1,226.48 on turnover of 71.4 billion yuan. The Shanghai B-share index was up 0.77 points, or 0.31 percent, to 247.06. The Shenzhen B-share index shed 0.22 points, or 0.04 percent, to 607.25.