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China B shares close mixed, profit-taking heavy

SHANGHAI: China's hard currency B shares closed mixed on Monday under pressure from heavy profit-taking after recent gains on rumours of official market-boosting measures and optimism over the economy.

Shenzhen's B share index ended down 0.70 percent at 93.31 points. Turnover rose sharply to HK$70.59 million.

In Shanghai, the B index ended up 1.49 percent at 42.477 points on buying triggered by a newspaper survey showing most domestic brokerages believe China's stock markets will stage a bull run this year due to an improving economy, brokers said.

But the Shanghai index was well off an intraday high of 43.148 points as profit-taking emerged late in the afternoon session, brokers said. Turnover rose sharply to $7.27 million. "There was heavy profit-taking today," said a broker at Everbright Securities. "It indicates the recent upward trend will lose steam soon if there are no market-boosting steps."

Both B share indices have surged around 15 percent in the past two weeks on market talk that the government would take steps to boost the hard currency share market, including the possibility of mutual funds devoted to B share investment.

The government has made no comment on the rumours.

The Shanghai Securities News said on Monday a survey by the newspaper covering 15 major Chinese brokerages showed 70 percent of them believed there would be a bull run on China's stock market this year, possibly in June.

The brokerages said they believed China's economy was improving and the government's decision to increase the money supply and boost fixed-asset investment would benefit the stock market, the newspaper said.

In addition, government efforts to support the stock market, including a plan to set up high-technology boards on the Shanghai and Shenzhen stock exchanges, would boost buying, it said.

Brokers said the newspaper report gave the stock market some support on Monday, but it could not support further gains as share prices were already at high levels due to the recent surges.

The B share indices were likely to consolidate in reduced trading volumes this week with investors waiting for market-boosting measures, they said.

China Bicycles Co 2017 which posted heavy net losses for 1998 and 1997, was the most active issue on the Shenzhen B share market, falling HK$0.03 to HK$0.81 on volume of 5.30 million shares.

The company has yet to report its results for last year.

In Shanghai, index heavyweight Zhejiang Southeast Electric Power Co 900949.SS was the most actively traded stock, rising $0.008 to $0.232 on volume of 2.89 million shares. Brokers said it was supported by domestic institutional buying.

China's domestic A shares were also under heavy profit-taking pressure after the A share indices hit repeated record highs in the past two weeks, brokers said.

Shenzhen's A share index closed down 0.55 percent at 600.75 points as turnover fell slightly to 16.94 billion yuan.

Shanghai's A index was up 0.03 percent to 1,916.208 points as turnover was little changed at 17.86 billion yuan.

Profit-taking focused on shares which had risen sharply in the recent bull run, brokers said.

In Shenzhen, China Southern Glass Co 0012 was the biggest decliner, falling its 10 percent daily limit of 1.68 yuan to 15.09 yuan on volume of 4.77 million shares.-Reuters