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1st LD-Writethru: China stocks end rally

Xinhua, July 24, 2015 Adjust font size:

Chinese shares ended a six-day winning streak on Friday, with the benchmark Shanghai Composite Index closing 1.29 percent lower at 4,070.91 points.

The smaller Shenzhen Component Index dropped 1.72 percent to close at 13,518.51 points. The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, slumped 2.36 percent to end at 2,897.82 points.

Total turnover on the two bourses rose to around 1.59 trillion yuan (259.5 billion U.S. dollars) from 1.4 trillion the previous day.

The benchmark Shanghai index opened higher, hovered around 4,100 points during the morning session after stock-index futures fell into negative territory and slumped quickly below 4,100 points in the afternoon.

Companies in the aviation and military industry led the rise while shares related to highways and securities were among the biggest losers.

Some recently-floated companies continued rallies, with firms such as Beijing Transtrue Technology and Zhengzhou Gl Tech CO. rising by the daily limit of 10 percent.

Sun Xiwei, a senior analyst with CITIC Securities, said that the market fluctuation had wiped too much off the share price of the recently-listed firms and they would probably bounce back in the short term.

Market confidence has been basically replenished after Thursday's big gain, Sun said.

Friday's correction came after a six-day consecutive gain boosted by the government's commitment to supporting the stock market, which lost almost a third of its value since its peak in mid-June.

Since the government bailout, which included slowing new share offerings and pouring in funds, investors have been highly sensitive to news that may signal a retreat in the government rescue. Stocks fluctuated on rumors of the authorities pulling stabilizing funding and restarting the initial public offerings process.

The People's Daily, the flagship newspaper of the Communist Party of China, published an article on Thursday stressing the importance of financial stability as the foundation of financial reforms in China. Endi