Chinese shares edge up 0.27% despite intra-day plunge

BEIJING, Feb. 25 (Chinese media) -- Chinese share prices managed to close up 0.27 percent Wednesday despite an earlier plunge led by property shares.

The benchmark Shanghai Composite Index, which covers both A and B shares, opened higher on Wall Street's overnight rebound, but plunged to 2144.3 points in the afternoon session. It was brought back to 2,206.57 points, up 5.92 points, by a strong financial sector.

The Shenzhen Component Index on the smaller Shenzhen bourse dropped to 8,241.66 points, down 161.36 points, or 1.92 percent.

Total turnover was 209.05 billion yuan (30.74 billion U.S. dollars), down from 250.4 billion yuan on Tuesday, showing that investors lacked confidence and felt reluctant to trade, analysts said.

Property stocks went down as news got around that the industry would not be listed in the government stimulus plan.

Cheng Siwei, a renowned economist, was quoted as saying Saturday at a public lecture that the property sector had replaced the energy sector as the last of the ten industries that the government would support to stimulate the economy.

But Cheng refuted the market hearsay Tuesday evening, saying that he has never made such comments.

China Vanke lost 3.32 percent to 7.57 yuan, while Poly Real Estate Group declined 4.28 percent to 19.03 yuan.

Steel stocks and the construction material sector was also affected, slipping 0.6 percent and 0.59 percent respectively.

Hunan Valin Steel Co. announced its agreement with Fortescue Metals Group, Australia's third-largest iron-ore miner, to invest 1.2 billion Australian dollars in the latter to acquire a 16.48-percent stake. The agreement still needed the approval of the Chinese and Australian governments to take effect.

Analysts said the move would ensure stable and long-term resource supply for the company. Its share price slipped 0.52 percent to 5.69 yuan amid a decline of the sector's stocks.

Led by strong bank shares, the financial sector rebounded in the afternoon, recovering losses in the morning. China Merchants Bank gained 8.12 percent to 14.92 yuan, while Shanghai Pudong Development Bank rose 4.02 percent to 17.09 yuan.

Aviation shares rose as words got around that the government is considering merging the two leading state-owned companies in the industry, China Aviation Industry Corporation I and China Aviation Industry Corporation II.

Aerospace Hi-Tech Holding Group was up by the daily limit of 10percent to 10.97 yuan. Shanghai Aerospace Automobile Electromechanical Co. gained 5.74 percent to 7.19 yuan.