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Well Girded: Laiwu Steel jumped over 6% today

CHINA’S SHANGHAI Composite Index was in consolidation mode again today, closing down another 0.8% to finish Monday at 2,363.95.

Only a resurgence in property, steel and auto stocks kept the benchmark index from letting off more steam, with Chinese A-shares having fallen nearly 30% this year, the world’s second worst-performing market save bankrupt Greece’s stock exchange.

Meanwhile, Hong Kong’s Hang Seng Index tracked its mainland counterpart, losing 0.33% to close at 19,839.34 today.

Analysts blamed the pall of Agricultural Bank of China’s leviathan listing hanging over the market, Damoclean-like, for the glum sentiment once again today, even after the Shanghai Composite eked out a modest 0.4% recovery during Friday trading.

Today’s closing level marks a 15-month nadir for the benchmark index with the mammoth state-owned bank’s listing along with other issues putting a serious crimp on liquidity.

So far in 2010, Chinese shares have lost 28% of their value, with turnover heavily impacted.

With more funds eyeing the last of the “Big Four” state-owned lenders to go public, turnover in A-shares today reached around 43 bln yuan, down considerably from Friday’s 61 bln yuan trading volume.

Losing A-share stocks numbered 625 today compared to 255 gainers.

Two of the biggest losing counters on the day were Shanghai-based Danhua Chemical Technology Co Ltd (SHA: 600844) which lost 8.64% and spirits trader Shandong Hiking International (SHA: 600735) which fell 8.55%.

Developers Regain Ground

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China is the world's second worst 1H performer

But not all was doom and gloom.

China’s A-share listed developers were on the upside today, thus preventing much bigger bloodletting in the index today.

At the mid-day break, the Shanghai Composite was flirting with a 2% decline, but real estate firms fought back on regional reports of housing unit price resurgence, allowing Poly Real Estate Group Co Ltd (SHA: 600048) to close up 2.66%, Financial Street (SZA: 000402) to add 1.85% and Shanghai Shimao (SHA: 600823) to strengthen by 4.76%.

Steel and financial stocks, often moving in tandem with the fortunes of the property sector, also gained today, with Bank of Beijing Co Ltd (SHA: 601169) adding 0.32%, while Laiwu Steel (SHA: 600102) was up an impressive 6.05%.

Auto stocks also generally performed well today.

Investors once again said the Agricultural Bank of China’s dual float in Hong Kong and Shanghai, likely to be the world’s biggest ever IPO, will continue to weigh on sentiment over the near term.

See last week's: World's largest IPO weighs on sentiment