China A-shares end morning lower; consumer plays hit by profit-taking

China A-shares finished the morning session slightly lower with consumer stocks hit by profit-taking, dealers said.

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

However, airlines saw some interest as a stronger yuan is seen reducing their foreign debt burden.

The benchmark Shanghai Composite Index ended the morning down 19.93 points or 0.38 pct at 5,288.96, off a high of 5,336.50.

"The market had a small correction on 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 that the weak US market had a limited impact on A-shares.

The Shanghai Composite Index has risen 8.56 pct so far this month, recovering from a 18 pct slump in November.

"I think the market could firm next year although at a slower rate of growth. The first quarter performance could be good," said Guotai Junan's Wu.

Chinese liquor maker Luzhoulaojiao Co Ltd (SZA 000568) fell 1.92 yuan to 72.08, and Wuliangye Yibin Co Ltd (SZA 000858) lost 0.83 yuan to 44.96.

Sichuan Changhong Electric Co Ltd (SHA 600839), a major TV maker, slid 0.24 yuan to 8.71, after the China Securities Regulatory Commission (CSRC) rejected the company's 400 mln-share private placement plan.

China United Telecommunications Corp Ltd (SHA 600050) declined 0.02 yuan to 12.27, after surging 8.28 pct yesterday on hopes its restructuring will go forward because of a government decision to accelerate the implementation of 3G.

Financial stocks were mixed with Ping An Insurance (Group) Co of China Ltd (SHA 601318; HK 2318) losing 2.24 yuan to 106.00. The insurer said it will lead a consortium to invest about 16 bln yuan in an express railway linking Beijing and Shanghai.

The Industrial and Commercial Bank of China (ICBC) (SHA 601398; HK 1398) edged up 0.03 yuan at 8.24. It agreed to pay 1.92 bln hkd for an additional 8.23 pct stake and warrants in Industrial and Commercial Bank of China (Asia) Ltd, purchasing the stake from Benelux group Fortis.

China Construction Bank Corp (SHA 601939; HK 939) rose 0.06 yuan to 9.93, after it unit CCB Financial Leasing Co Ltd, a joint venture with Bank of America, received a business license from the State Administration for Industry and Commerce.

Pacific Securities Co Ltd (SHA 601099), based in southwestern China's Yunnan province, soared 36.16 yuan or 452 pct to 44.16, on its first trading day in Shanghai after a backdoor listing via Unida Co Ltd.

Airlines were active after the central bank 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) gained 0.92 yuan to 20.86, and Air China Ltd (SHA 601111) added 1.08 yuan to 28.22.

Zhejiang Supor Cookware Co Ltd (SZA 002032) surged 9.87 pct to 49.00 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 20.97 points to 5,550.36, while the Shenzhen A-share Index lost 3.83 points to 1,523.98.

The FTSE/Xinhua China A 50 Index was down 60.58 points at 20,542.98 and the FTSE/Xinhua China A 200 Index was down 26.85 points at 15,136.40.

(1 usd = 7.3 yuan)