Blue chips fall as trading nears end

DOWNDRAFT of blue chips in the last minutes dragged the benchmark Shanghai index to close lower on the last trading day of 2007, on concerns that the central government may issue further policies during the New Year's holiday to cool down the nation's economy next year.

Banks, and heavyweights PetroChina and China Shenhua Energy, led the fall, trimming gains by the air carriers.

The Shanghai Composite Index, tracking both yuan-dominated A shares and hard currency B chips, dipped 47.33 points, or 0.89 percent, to finish at 5,261.56. The A shares fell 0.89 percent while the B shares lost 0.25 percent. It gave the composite index a 96.7-percent gain for the year.

Transactions also shrank a little to 133.68 billion yuan (US$18 billion). Losers outnumbered gainers at 524 to 289. Another 87 stocks closed flat.

The Shenzhen Composite Index, which covers the smaller of the mainland's two bourses, fell 0.44 percent to finish at 1,447.06. The gauge rose 163 percent this year.

"Investors are worried that the central government might choose the New Year's holiday to announce some measures to cool down the economy, and choose to cash out their gains," said Huang Ruijun, an analyst with Guangfa Securities.

Shares in Shanghai gave up intraday gains in the last 15 minutes before the close as banks began to sink. The Industrial and Commercial Bank of China fell 0.97 percent to 8.13 yuan. Bank of China dipped 0.6 percent to 6.61 yuan.

PetroChina dropped by 1.37 percent to close at 30.96 yuan. China Shenhua Energy Co fell 1.84 percent to 66.61 yuan.

China Eastern Airlines Corp soared 6.77 percent to 21.29 yuan. Shanghai Airlines Co rose 3.56 percent to 17.47 yuan. Air China gained 1.11 percent to 27.44 yuan.

The market will be closed from today to January 1. It will also be closed from February 6 to 12 (Spring Festival), April 4 to 6 (Qingming Festival), May 1 to 3 (May Day holiday), June 7 to 9 (Dragon-boat Festival), September 13 to 15 (Mid-Autumn Festival) and September 29 to October 5 (National Day holiday).