By Li Zengxin (chinadaily.com.cn)
Updated: 2007-08-28 16:29

The stock market experienced higher volatility amid violent fluctuations today after the main index kept rising robustly for six straight trading days. The Shanghai Composite Index edged up today, but the Shenzhen bourse, lacking heavyweight stocks, failed to perform well.

Total turnover of stocks in the two major bourses was 258.6 billion yuan, lower than that of yesterday.

Shanghai Composite Index
Source: sina.com.cn

The Shanghai index slid after opening lower at 5,134.14 points, and hit a low of 5,058.45. Then it turned around to climb steadily, but dipped again in the last half-hour of the morning session. In the afternoon, it reclaimed the lost ground. The spread between the lowest point and the highest 5,209.51, at the mid-afternoon session, grew to 151 points, the largest since last Monday. Finally, the index stopped at 5,194.69, up 44.57 points or 0.87 percent from yesterday. Of all the A shares in Shanghai, 331 went up, 444 closed down and 67 ended flat.

Shenzhen Component Index
Source: sina.com.cn

The Shenzhen Component Index, tracking the smaller Shenzhen Stock Exchange, closed at 17,817.931, down 66.91 points or 0.37 percent. Opening lower at 17,815.11, it went through the day below yesterday's closing level, within a range of between 17468.69 and 17,870.95. Of the A shares, 232 rose, 326 dropped and 81 stayed unchanged.

Stocks in the media and culture, food and construction sectors were the best performers. Insurance and securities shares were also strong, led by Northeast Securities with a perfect 10 percent rise after yesterday's over 200 percent growth on its first trading day from suspension for a back-door takeover. Bank shares, the usual index-drivers, however, lost supports as all of them except Industrial Bank lost ground.

Along with stocks continuously breaking records, downward pressure is accumulating both psychologically and technically, analysts said.

Since last Monday, the benchmark Shanghai Composite Index not only surpassed the critical 5,000-point mark, but climbed more than 10 percent in the past six trading days in a row. By the close of yesterday, the total market value of all securities in the two exchanges reached 22.959 trillion yuan, 9.6 percent more than China's entire gross domestic product for 2006. The average price to earning ratio was 58 in Shanghai and 68 in Shenzhen.

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