Shanghai shares decline as investors pocket profit

SHANGHAI stocks declined today after soaring to an eight-month high as a bout of profit taking offset robust data indicating that Chinese manufacturing may have rebounded to a two-year high in January.
The key Shanghai Composite Index lost 0.79 percent to 2,302.60 points after reaching 2,362.94 points, the highest since May 29. Daily turnover was 135.6 billion yuan (US$21.9 billion).

"The index fell on market correction as investors seeking quick profits took their money off the table," said Yang Liu, analyst with Qilu Securities.
As of January 22, big shareholders and senior executives of listed companies have sold 550 million shares worth 5.5 billion yuan this month, data from Wind Information Co showed. The figure represented a 46 percent increase from last month and was the highest in eight months.
HSBC's Flash China Purchasing Managers' Index, an early indicator of manufacturing activity slanted more towards private and export-oriented firms, climbed to 51.9 this month, compared with 51.5 in December, HSBC Holdings PLC said today.
A reading above 50 indicates the activity is expanding.
"January's PMI made a good start for the year by rising for the fifth straight month to a two-year high," said Qu Hongbin, chief economist for China at HSBC. "Although the external demand remains weak, inventory replenishment among domestic enterprises will continue to boost economic recovery."
Environment-related stocks declined the most. Beijing Capital Co, a company specializing in sewage disposal, dropped 2.7 percent to 4.40 yuan. Tianjin Capital Environmental Protection Group decreased 3 percent to 5.32 yuan.