China A-shares close lower on profit-taking; index up 96 pct for 2007

China A-shares closed lower on profit-taking ahead of the New Year holidays, with heavyweights such as PetroChina and ICBC lower in the last trading session of the year, dealers said.

A sell-off on Wall Street following the assassination of Pakistan opposition leader Benazir Bhutto, which stoked geopolitical worries, also kept investors from buying heavily.

The benchmark Shanghai Composite Index closed down 47.33 points or 0.89 pct at 5,261.56.

Turnover fell to 133.68 bln yuan from 147.04 in the previous session.

In 2007, the index closed up 96.66 pct, after having risen to as much as 6,124.04 points intraday on Oct 16.

"The market had a small correction from an uptrend dating from mid-December," said Wu Dazhong, an analyst at Guotai Junan Securities. "The Shanghai Composite Index faced resistance when it neared the 60-day moving average of 5,368 points."

He said the weak US markets had a limited impact on the A-shares.

The Shanghai Composite Index rose 8 pct in December, recovering from an 18 pct slump in November.

"Large caps dragged down the market today, but we do not expect steep falls in the near term because fundamentals do not support it," said Hu Yu, an analyst at Chinalion Securities. "The market is likely to continue the momentum in early 2008."

Hu projects a possible rise to 8,000 points.

The Industrial and Commercial Bank of China (ICBC) (SHA 601398; HK 1398) shed 0.08 yuan to 8.13, and China Life Insurance Co Ltd (SHA 601628; HK 2628) declined 1.36 yuan to 57.66.

Ping An Insurance (Group) Co of China Ltd (SHA 601318; HK 2318) lost 3.24 yuan to 105.00. The insurer said it will lead a consortium to invest about 16 bln yuan in an express railway linking Beijing and Shanghai.

PetroChina Co Ltd (SHA 601857; HK 0857) fell 0.43 yuan to 30.96, and China Petroleum & Chemical Corp (Sinopec) (SHA 600028; HK 0386; NYSE SNP) lost 0.58 yuan to 23.43.

China United Telecommunications Corp Ltd (SHA 600050) declined 0.21 yuan to 12.08, after surging 8.28 pct yesterday on hopes its restructuring will go forward because of a government decision to accelerate the implementation of 3G.

Sichuan Changhong Electric Co Ltd (SHA 600839), a major TV maker, tumbled 0.32 yuan to 8.63, after the China Securities Regulatory Commission (CSRC) rejected the company's 400 mln-share private placement plan.

Pacific Securities Co Ltd (SHA 601099), based in southwestern China's Yunnan province, soared 33.92 yuan or 424 pct to 41.92, on its first trading day in Shanghai after a backdoor listing via Unida Co Ltd.

Airlines saw some interest as a stronger yuan is seen reducing their foreign debt burden. The central bank today set the yuan's daily reference rate at a record 7.3046 to the dollar.

China Eastern Airlines Corp Ltd (SHA 600115; HK 0670; NYSE CEA) surged 1.35 yuan to 21.29, and Shanghai Airlines Co Ltd (SHA 600591) added 0.60 yuan to 17.47.

Zhejiang Supor Cookware Co Ltd (SZA 002032) rose by the 10 pct daily trading limit to 49.06 yuan, after French kitchen equipment maker SEB said it will offer a special stock dividend of 10 shares for every 10 held in Zhejiang Supor by public shareholders.

The Shanghai A-share Index fell 49.85 points or 0.89 pct to 5,521.49 and the Shenzhen A-share Index was down 6.82 points or 0.45 pct at 1,520.99.

The FTSE/Xinhua China A 50 Index was down 158.67 points at 20.444.89 and the FTSE/Xinhua China A 200 Index was down 92.53 points at 15,070.72.

(1 usd = 7.3 yuan)