Stock markets in Shanghai and Shenzhen took a dive Thursday as construction-related shares made downward corrections.
The Shanghai Composite Index declined 16.18 points, or 0.76 percent, to close at 2,110.38; while the Shenzhen Component Index slumped 1.09 percent, or 95.73 points, to finish at 8,691.00.
Both indices opened lower Thursday and retreated in the early morning session due to contractions in the heavily weighted machinery, cement and non-ferrous metal sectors. The markets pulled off a few brief spikes above the break-even point in the afternoon on gains in the military manufacturing, polysilicon and real estate sectors, although the pressure from falling cement and heavy equipment stocks plunged both markets into negative territory by the end of the day.
Stocks exposed to China's infrastructure development picture declined Thursday amid speculations that they had been overbought following news late last week that the National Development and Reform Commission had given its nod to two major rounds of public works projects, say analysts.
Shanghai-listed Anhui Conch Cement Co dived 1.83 percent to 14.99 yuan ($2.37). Sany Heavy Industry Co shed 3.05 percent to 9.87 yuan.
Military stocks were buoyed broadly by the escalating territorial dispute between China and Japan over the Diaoyu Islands. Shanghai-listed Sichuan Chengfa Aero-Science & Technology Co, a manufacturer and distributor of aerospace products, shot up 8.21 percent on the day to 10.68 yuan. Shanghai-listed North Navigation Control Technology Co climbed to the daily limit to close at 10.07 yuan on the day.
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