Shares in China ended lower on Tuesday as investors cashed in gains on small-cap shares that recently outperformed a market rebound, while Hong Kong gave up most of its earlier gains. The Shanghai Composite Index ended the day down 0.7 percent at 3,053 points after rising to 3,082 at the start of the trading session, aiming to break through the 125-day moving average now at 3,098 points.
"The market should find support near the psychologically important 3,000-point level," said Cheng Yi, analyst at Xiangcai Securities. "Further large falls are unlikely as the index will continue to trade narrowly for the rest of the week." Investors have recently focused more attention on technical factors amid an absence of market-moving domestic news, with the index climbing most of last week after finding support at the 250-day moving average, now at 2,952 points.
Losing Shanghai stocks outnumbered gainers by 643 to 253 on Tuesday with limited movement in large-cap stocks, while turnover eased to 108 billion yuan ($15.82 billion) from Monday's 113 billion yuan. Computer service provider Insigma Technology was the day's most actively traded stock, reflecting investor interest in high-tech issues. It gained 0.5 percent to 8.83 yuan.
"The market is glued around 3,050, with neither the bulls nor the bears able to make a significant advance," said a trader at a major Chinese brokerage in Shanghai. "The key problem is the absence of leading stocks among index heavyweights. Investors are not willing to put fresh funds into the market without any prospects for making money.
Hong Kong shares gave up some earlier gains as investors took profit in the afternoon session on worries China may further tighten liquidity through a rise in bank reserve ratios. Hong Kong's benchmark Hang Seng Index closed up 0.3 percent at 20,987, easing from a 1 percent gain at midday. Turnover fell for a fourth day to HK$53.6 billion ($6.9 billion) from Monday's HK$55.5 billion.
"There is lack of buying power," said Jackson Wong, investment manager at Tanrich Securities. "Investors are still afraid China will roll out more policies to cool the economy and tighten liquidity. That's probably the atmosphere right now."
Exporters outperformed on expectations overseas demand for their products would rise as the global economy recovered, dealers said. Li & Fung gained 4.7 percent and closed at a record high. The China Enterprises Index of top locally listed mainland Chinese stocks edged up 0.1 percent.
Bank of China rose 1.8 percent ahead of its earnings release later in the day. Macau casino operators Sands China advanced 0.7 percent and Wynn Macau was up 2.1 percent, tracking gains in the US-listed shares of their respective parents Las Vegas Sands and Wynn Resorts. China Telecom rose 5.1 percent to a five-month high as it planned to spend the same or more than 2009 on handset subsidies for its new mobile service.
Comments
Comments are closed.