China shares soft, airlines surge on merger hopes

Most Chinese shares fell on Wednesday, led by coal and non-ferrous metals producers, but airline stocks surged, partly because of speculation about merger activity in the industry. The Shanghai Composite Index ended the morning up 0.05 per cent at 2,847.581 points.

Losing A shares in Shanghai outnumbered gainers by 575 to 321, while turnover in Shanghai A shares remained moderate at 33.8 billion yuan ($5.0 billion) against Tuesday morning's 36.6 billion yuan.

Gold fell sharply overnight along with oil, and this hurt gold producing shares, with Shandong Gold down 3.47 per cent to 60.45 yuan. Tianma Microelectronics raced up 8.26 per cent to 8.39 yuan in heavy turnover after saying it planned to invest 3 billion yuan in establishing a thin film transistor liquid crystal display production line in Chengdu.

Two new shares staged strong debuts in Shenzhen, with Hunan Talkweb Information System up 103 per cent from its IPO price to 31.20 yuan, above analysts' expectations of 25-28 yuan for its first day of trade, and Jiangsu Ehwa Pharmaceutical up 145 per cent to 13.93 yuan, exceeding expectations of 10-12 yuan. ($1 = 6.82 yuan)

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