STOCK MARKET WATCH - Thursday, 5 January 2012

[Ghost Dog]

15. Shanghai shares close at 34-month low, but Hong Kong gains

HONG KONG, Jan 5 (Reuters) - China shares closed at their lowest level in almost 34 months on Thursday on fears that the Chinese economy will cool further, with strong turnover a bearish sign pointing to more losses to come.

Hong Kong stocks managed to hold on to gains despite the downdraft from mainland markets, with the Hang Seng Index ending up 0.5 percent at 18,813.4 points, and the China Enterprises Index of top mainland listings in Hong Kong gaining 0.5 percent. But traders said weak turnover in Hong Kong pointed to a lack of confidence and signaled that the day's gains may not be sustained.

In Shanghai, investors unwound positions in growth-sensitive sectors and small cap names after the HSBC China services purchasing managers index (PMI) for December showed only sluggish growth in the sector.

The Shanghai Composite Index reversed early gains to slip for a second-straight session, closing down 1 percent at 2,148.5 points. The Shanghai materials sub-index was a relative underperformer, declining 2.4 percent... The CSI500, a gauge of small- and medium-cap names listed on the Shanghai and Shenzhen bourses, slumped 3.7 percent.

/... http://uk.reuters.com/article/2012/01/05/markets-hongkong-china-stocks-update-idUKL3E8C5ESO20120105