Markets fall short of victory, building plan buoys cement shares

Stock markets on the Chinese mainland posted modest drops Thursday as a general malaise displaced the more acute liquidity fears which dominated trading earlier in the week.

The Shanghai Composite Index ditched 1.48 points, or 0.08 percent, to close at 1,950.01; while the Shenzhen Component Index shaved off 0.29 percent, or 22.07 points, to finish at 7,544.33.

Both benchmarks opened higher Thursday and traded mostly above par throughout the day as strong performances from the heavily weighted banking, real estate and steel sectors kept the indices treading water.

Media, securities and logistics stocks mostly tumbled in late trading though, reeling in the early gains and pulling the Shanghai Composite and the Shenzhen Component below even as the afternoon came to a close.

Combined turnover at the two exchanges climbed to 188.8 billion yuan ($30.70 billion), slightly higher than Wednesday's 182.1 billion yuan.

The State Administration of Foreign Exchange (SAFE) announced that it had granted a total of 9.2 billion yuan in investment quotas to renminbi qualified foreign institutional investors (RQFII) on June 24, the Securities Times reported Thursday.

Analysts said that the SAFE's move was aimed at restoring sentiment, but the impact of the currency authority's latest round of quotas was muted by the bearish gloom shrouding the market.

Cement, building material and environmental protection equities benefited from news that the central government intends to improve housing conditions for the poor with accelerated reforms. Anhui Conch Cement Co added 2.05 percent to 12.96 yuan. Shanghai Safbon Water Service Co climbed 5.86 percent to 13.00 yuan.

Banking shares got a chance to lick their wounds Thursday after liquidity concerns propelled the sector deep into contractions. Shanghai Pudong Development Bank added 1.42 percent to 7.88 yuan. China Merchants Bank Co climbed 2.72 percent to 10.95 yuan.

In the steel sector, Chongqing Iron & Steel Co Ltd reached the daily 10-percent limit to close at 2.60 yuan. Bengang Steel Plates Co went up 5.08 percent to 2.69 yuan. Liuzhou Iron & Steel Co edged up 5.16 percent to 2.24 yuan.

On the downside, most brokerages dipped. Huatai Securities Co lost 0.38 percent to 7.78 yuan Thursday. Shanxi Securities Co contracted 3.81 percent to 5.80 yuan on the day.