Shares Remain Flat, Steelmakers Weak

The mainland stock market slipped 0.46 percent yesterday, with steel shares weak after Angang Steel's profit warning and financial shares mixed as investors grew wary over economic data due later in the week.

The Shanghai Composite Index ended at 1985.016 points, after slipping into negative territory in the afternoon and breaking a three-day winning streak that had been fuelled by hopes of government aid for struggling industries.

Turnover in Shanghai A shares was 68 billion yuan, up from 55.5 billion yuan on Tuesday.

"The index is expected to continue consolidating this week," said Qian Xiangjing, analyst at CITIC-Kington Securities.

He did not think market sentiment was strong enough to push the index decisively through the 2000 mark ahead of next week's Lunar New Year holiday.

Angang Steel sank 2.94 percent to 7.91 yuan after saying it expected its 2008 net profit to have fallen 55 percent to about 3.42 billion yuan due to high raw material costs and slumping steel prices.

China Life sagged 1.82 percent to 19.92 yuan after saying its 2008 net profit may fall more than 50 percent due to a significant decrease in investment returns from its equity assets.

Suning Appliance, China's second-largest electronics retailer, tumbled 9.1 percent to 15.88 yuan in its second-heaviest day of trade since listing. It said 2008 net profit rose an estimated 40 to 50 percent from a year earlier, down from a previous estimate for a rise of 60 to 80 percent.

Bluestar New Chemical Material slid 5.28 percent to 8.61 yuan after estimating it made a net loss of 120 million to 170 million yuan, compared with a net profit of 418 million yuan in 2007.

Hong Kong shares dropped 2.9 percent to a nearly two-month low yesterday as more Chinese companies issued profit warnings and investors worried the global financial crisis would become protracted.

The Hang Seng Index dropped 376.14 points to end at 12583.63, the lowest closing level since Nov 24, 2008, when the index finished at 12457.94.

Mainboard turnover rose to HK$47.7 billion from Tuesday's HK$39.6 billion.

Index heavyweight HSBC lost a further 4.4 percent after sliding as much as 8.8 percent on Tuesday, pressured by sector worries. But the UK-based lender said on Monday it could not envision circumstances under which it would need to seek government support.

The China Enterprises Index of top locally listed mainland firms fell nearly 4 percent to 6730.82.