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Shares conclude worst annual performance, down 0.66%

(Xinhua)
Updated: 2008-12-31 19:51

Chinese shares edged down 0.66 percent on the last day ahead of the New Year holiday with thin trade volume, as investors confidence remained low, said market dealers.

The benchmark Shanghai Composite Index shed 0.66 percent or 12.10 points to 1,820.81. The Shenzhen Component Index fell 1.11 percent or 72.65 points to 6,485.51.

Related readings:  Chinese shares open slightly higher on last trading day of 2008

Combined turnover was 55 billion yuan ($8 billion). It declined from 60 billion yuan in previous trading day. Losses outnumbered gains by 638 to 159 in Shanghai and by 476 to 205 in Shenzhen.

An overnight rally in US and European markets gave local bourses a mild boost. The index opened 2 points higher than the previous day, but worries over weakening corporate profits still weighed on the sentiment.

In the afternoon session, the index was dragged down by weak oil and chemical shares. Sinopec, the country's leading oil refiner, saw its shares decline 0.71 percent to close at 7.02 yuan.

Iron and steel shares failed to reverse the declining trend in the previous days and continued to fall, as some companies expected poor business earnings in the fourth quarter.

Tangshan Steel fell by a daily limit of 10 percent to close at 3.69 yuan. Handan Steel ended at 3.25 yuan, down 5.25 percent.

Weak demand for energy, such as coal, electricity and gas also pulled down relevant stock prices. Jinniu Energy Resources shed 6.04 percent to 14 yuan, while Hengyuan Coal and Electricity dropped 5.13 percent to close at 11.09 yuan.

The market reflected investors' cautious outlook on the economy, said Lin Songli, analyst of Guosen Securities. "A wait and see attitude is lingering around the market."

China's equity market experienced a painful year in 2008, as weak sentiments loomed and drove equity prices lower amid the complex domestic and world economic situation.

The Shanghai index pared more than 65 percent this year from last year's 5,261.56 points, while the smaller Shenzhen market earmarked losses of 62.95 percent during the same period. The performance of the country's stock market was said to be one of the worst worldwide.

Compared with domestic indices, world major indices also posted dramatic losses, largely due to the wide spread financial crunch that first came out of the US sub-prime mortgage crisis.

The major Wall Street index, Dow Jones, plunged about 36 percent in 2008. The Standard & Poor's 500 index slid 41.2 percent and the Nasdaq lost more than 43 percent during the same period.

"Performance of the stock market can directly reflect one country's economic situation. People found it hard to make money from the market this year," said Wu Xiaoqiu, a professor of Renmin University of China.

"However, things always change. The government has issued a series of policies and measures to boost the economy, and these measures are expected to take effect gradually," Wu added.

Last month, the Chinese government unveiled a 4 trillion yuan economic stimulus package to boost economic growth and domestic demand.