Stocks end flat in worst month since May

SHANGHAI'S stock market was flat today, ending the worst month since May as investors remained cautious ahead of an official industrial data release.

The benchmark Shanghai Composite Index edged up 0.03 percent to 2,567.34 points. Turnover fell to 62.2 billion yuan (US$9.73 billion) from yesterday's 79.5 billion yuan.

The index dropped 5 percent this month, the largest monthly loss since May, amid financial turmoil after Standard & Poor's downgraded the US credit rating for the first time in seventy years.

"Price levels were still high in August and liquidity is under the pressure of stricter controls on bank reserves," Founder Securities wrote in a report. "The market is waiting for signal to buy or sell from economic data for August."

The official purchasing managers index, a measure of industrial expansion, is due tomorrow. A preliminary reading of HSBC's PMI index released last week showed that China's manufacturing activity was slowing down for the second month this year.

Baoshan Iron & Steel Co dropped 0.75 percent to 5.29 yuan after reporting that its first half net profit dropped 37 percent from a year earlier on slowing demand and rising costs. The company also predicted a gloomy outlook for the second half of the year.

Distillers led the gainers after the three largest firms reported average profit gains of 35 percent annually in the first half. Wuliangye Yibin Co improved 2.5 percent to 40.06 yuan, after it said it would raise prices for its alcoholic beverages by 20 to 30 percent from September 10. Sichuan Swellfun Co jumped 5.1 percent to 25.29 yuan.

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