SHANGHAI: Dragged down by PetroChina, the largest mainland listed company, the China stock market fell 1.46 percent at the close yesterday, after a brief spurt in the morning.
The benchmark Shanghai Composite Index opened 1.7 percent higher and closed 1.36 percent higher in the morning, pushed by 3.56 trillion yuan refunded from the subscription of three companies' initial public offerings. But the index nosedived in the afternoon to close at 4958.85, with 607 out of 906 stocks closing lower.
The turnover on the bourse increased to 60.569 billion yuan.
The Shenzhen Component Index tumbled 0.99 percent to close at 16057.19.
Many large-caps fell following the plunge of PetroChina, which weighted 22 percent of the Shanghai Composite Index. PetroChina sunk 2.4 percent to close at 33.76 yuan. China Life tumbled 3.02 percent to close at 55.81 yuan. Industrial and Commercial Bank of China slid 1.39 percent to close at 7.79 yuan.
"The weak performance of PetroChina dragged the main index down, which triggered the low sentiment among investors," Wu Feng, an analyst from TX Investment Consulting Co Ltd, said.
"We lowered the reasonable price level of PetroChina to around 30 yuan per share because the company's annual growth rate is expected to be much lower, which will also pulled down the aggregated profit growth of other listed companies."
According to TX Investment, PetroChina's profit is expected to grow 16 percent in 2008, lower than the expected 35 percent growth of all listed companies.
"Investor sentiment is still low and needs time to recover," Wu Gang, an analyst at Orient Securities, said.
The daily new A share accounts opened on Friday was as low as 122,647.
Zhu Haibin, an analyst at Essence Securities said, "The overseas stock markets involve lots of uncertainties, which are also the concerns of many investors. Thus, the China stock market is not expected to recover quickly and will fluctuate around 5,000 points."
Source: China Daily
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