SHANGHAI - Chinese share prices were 0.44 percent lower Monday morning ahead of the release of key economic data that is widely expected to show the economy is accelerating from an already blistering pace, dealers said.
They said the mood was cautious amid concerns that the government will be forced to renew efforts to cool Asia's second largest economy after the release of first half economic data due on Wednesday.
Dealers said investors widely believe that regulators are likely to unveil another interest rate hike or a new set of tax polices after the figures.
Data released last week showed that China's economy roared ahead even faster than originally thought last year, with the government revising 2006 growth domestic product (GDP) to 11.1 percent from 10.7 percent.
"Investors are waiting for the government moves," said Wu Feng, a Shanghai-based analyst at TX Investment Consulting.
Dealers also said that in the short-term, pressure over a potential lack of liquidity due to a spate of upcoming new share subscriptions was likely to make the market more volatile.
The official Shanghai Securities News reported Monday that four upcoming initial public offerings (IPOs), including Bank of Nanjing and Bank of Ningbo, attracted more than two trillion yuan (264 billion dollars) from investors.
China Coal Energy, one of the country's major producers, said late Sunday it plans to sell up to 1.52 billion shares in Shanghai to fund new projects.
"The inactive trade and low turnover was partly due to the IPOs, including ongoing share offers and those in the pipeline, as they take away some funds from the market," said Zhang Qi, an analyst with Haitong Securities.
The benchmark Shanghai Composite Index, which covers both A- and B-shares listed on the Shanghai Stock Exchange, ended the session down 17.11 points or 0.44 percent at 3,897.29.
The Shanghai A-share Index lost 17.78 points or 0.43 percent to 4,088.43 and the Shenzhen A-share Index shed 11.69 points or 1.03 percent to 1,124.45.
07/16/2007 04:39 GMT