Shanghai A-shares close morning flat; B-shares near lows in volatile trade

SHANGHAI (AFX-ASIA) - A-share prices closed the morning flat in directionless trade amid a lack of fresh leads, dealers said. B-share prices closed the morning near their lows after profit-taking drove prices from their initial highs in volatile trade, they said. B-share turnover was thinner than seen recently, with domestic buyers appearing more cautious amid doubts about the market upside potential following two weeks of sustained sharp gains, they said. Analysts said A-share trade was lacklustre, while there was little fresh news to direct the market. Comments by Premier Zhu Rongji at a major press conference yesterday also provided few leads in terms of stock market reforms or economic policies, they said. Nonetheless, Zhu's apparent reluctance to comment on the stock market may signal the government's desire to treat the market with caution, in order to ensure that share prices do not collapse, they said. Although Zhu's comment that any merger of A- and B-share markets will take a long time was in line with previous official comments on a market merger, it may have contributed to a weakening of domestic investor sentiment towards B-shares, they said. Reports citing an official at the China Securities Regulatory Commission as saying that the commission's policy on the delisting of loss-making firms applies to both A- and B-share companies may also have contributed to the more cautious mood, they said. The A-share index closed the morning down 5.62 points at 2,119.40 on turnover of 4.59 bln yuan after trading between 2,126.52 and 2,119.34. The B-share index closed 1.51 points lower at 131.91 after trading between 135.41 and 131.91. The composite A- and B-share index closed 5.67 points lower at 2,016.93 on turnover of 5.46 bln yuan after trading to a high of 2,024.28 and a low of 2,016.87. The SSE-30 index dropped 12.38 points to 3,893.53. more

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