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Profit taking brings down record high benchmark index
Last Updated(Beijing Time):2007-05-09 17:18

Profit taking has brought down the record high benchmark Shanghai Composite Index by 0.6 percent to close at 3926.45 points in the morning session.

The benchmark Shanghai Composite Index broke the 4,000-point mark at 10:49 a.m. to reach 4014.31 points and began to decline afterwards.

Analysts attributed the slight decline to heavy weights such as China Unicom, Bank of China and Industrial and Commercial Bank of China, which maintained strong momentum in the morning session.

The component index on the smaller Shenzhen Stock Exchange went through similar fluctuations to close at 11,164.2 points, down by 2.08 pints.

The two stock exchanges saw declining shares tripled rising ones and closed at a combined turnover reaching over 200 billion yuan (26 billion U.S. dollars).

Telecommunication stocks led the rally. China Unicom, China's second largest mobile operator, rose by the daily limit of 10 percent. Bank of China and Industrial and Commercial Bank of China rose by eight percent.

An influx of investor cash after China's week-long May Day holidays helped push share prices further up when the markets reopened on Tuesday.

Analysts said the confidence was spurred by gains on overseas markets during the seven-day shutdown of the Shanghai and Shenzhen markets.

The Shanghai Composite Index closed at 3,950.01 points on Tuesday, up 108.74 points from the previous close of 3,841.27, on a turnover of 207.4 billion yuan.

The component index on the smaller Shenzhen Stock Exchange climbed 4.93 percent, or 535.24 points, to close at 11,401.12 points on a turnover of 105.7 billion yuan.

The central parity rate of China's currency yuan, also known as Renminbi (RMB), hit new high at 7.6951 yuan to one U.S. dollar on Tuesday.

Analysts warned of potential stock bubbles as expectations of RMB appreciation would draw hot money from abroad into China's equity markets.

In the first quarter to end March, 4.78 million stock accounts were opened in China and in April alone, another 4.5 million new accounts were set up.

Source:Xinhuanet 
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