September 29, 2009 / 7:09 AM / 10 years ago

China shares edge lower, head for quarterly loss

SHANGHAI, Sept 29 (Reuters) - China’s key stock index closed 0.33 percent lower on Tuesday with recently listed newcomers actively traded, as investor sentiment remained depressed by heavy supplies of new shares, including initial public offerings on China’s planned Nasdaq-style second board, ChiNext.

The Shanghai Composite Index .SSEC ended at 2,754.540 points after closing down 2.65 percent on Monday, weighed down as the market's prospects also looked poor for its return from an eight-day National Day holiday that starts on Oct. 1.

The benchmark index has lost 6.9 percent so far this quarter, heading for its worst quarterly performance this year.

“With huge supplies looming in the markets, including ChiNext, the index should have room to fall further immediately after the holiday,” said Zheng Weigang, head of investment at Shanghai Securities. “Funds are being diverted from existing shares.”

Turnover of Shanghai A shares was thin at 74 billion yuan ($11 billion), its lowest since March 16 and down from 75 billion yuan on Monday, while losing Shanghai A shares overwhelmed gainers by 724 to 167.

The market’s youngest stock, Metallurgical Corp of China (601618.SS), was the day’s most active stock, ending up 1.43 percent at 5.68 yuan as bargain hunting emerged after a fall in the morning pushed it within reach of its IPO price of 5.42 yuan.

Another newcomer, China State Construction and Engineering Co (601668.SS), dropped 1.48 percent to 4.66 yuan. ($1 = 6.83 yuan) (Reporting by Lu Jianxin and Edmund Klamann)

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