1st LD-Writethru: Chinese shares end rally

Chinese stocks ended a rally on Thursday as investors took profits after two days that brought the major index to a two-week high.

The benchmark Shanghai Composite Index went down 0.34 percent to close at 3,635.55 points while the smaller Shenzhen index lost 0.98 percent to close at 12,767.5 points.

The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, dipped 2.22 percent to close at 2,833.2 points.

Total turnover on the two bourses stood at 1.1 trillion yuan (172billion U.S. dollars), compared with 1.02 trillion yuan the previous trading day.

The market opened higher in the morning and dived quickly in the afternoon as profit taking set in before the resumption of IPOs next week, which are expected to attract capital of around one trillion yuan.

Shares related to environmental protection, medical equipment and electronic devices led the slump, while companies in nonferrous smelting and coal mining saw their prices up.

As well as the Shanghai Composite Index peaking, the ChiNext Index also hit its highest point since July 27 on Wednesday.

The market will continue to recover next year as investors come back to the stock market for higher returns when interests on fixed-income assets continue to drop, said Qiao Yongyuan, chief strategist of Guotai Junan Securities.

The Shanghai Composite Index will fluctuate between 3,200 points and 4,500 points, Qiao predicted. Endi