China shares end lower as property fever ebbs

SHANGHAI: China's key stock index closed down 0.9% on Wednesday, Dec 22 as speculation in property stocks a day earlier died down, while cash flows in stock trading slowed due to a liquidity crunch in the money market.

Most institutions, such as brokerages and insurers, have also met their 2010 annual financial targets, and are not willing to conduct major transactions in the final few trading days of the year, traders said.

The benchmark Shanghai Composite Index ended at 2,877.9 points after rising 1.8% on Tuesday, driven by speculation in property stocks.

Shanghai's property index edged down 0.3% to 3,532.3 after jumping 5.4% on Tuesday as speculators and mutual funds built heavy positions on a report forecasting urban housing prices would jump 20% next year.

Top property issue China Vanke, Wednesday's most actively traded stock, dropped 1.4% after jumping its 10% daily limit on Tuesday.

The money market is in an acute squeeze after a slew of official monetary tightening steps since mid-October, with the benchmark short-term rate rising another 8 basis points to a fresh more than two-year high on Wednesday. — Reuters