The mainland stocks edged up 0.11 percent yesterday, with property and metal stocks firm but coal and financials hit by profit-taking after recent gains. Ample liquidity continued to bolster the market.

The Shanghai Composite Index ended at 2724.302, a fresh 10-month closing high. The index has surged 50 percent so far this year.

Turnover in Shanghai A shares edged up to 161.0 billion yuan, a three-week high, from Monday`s 156.1 billion yuan.

"The market does not lack money, which keeps pouring into stocks on expectations of economic recovery," said Cao Xuefeng, analyst, Western Securities.

A joint research report by the official Shanghai Securities News and Shenyin & Wanguo Securities showed a net inflow of 52 billion yuan into the stock market in May, fuelled in large part by the launch of new funds, and it expected the trend to continue in early June.

PetroChina, Asia`s largest oil and gas producer and the Shanghai index`s most heavily weighted stock, rose 0.4 percent to 14.23 yuan, extending a nearly 5 percent gain on Monday amid firmer crude oil prices and this week`s fuel price hike.

Carmakers were firm, with SAIC Motor Corp, China`s biggest carmaker and a partner of General Motors Corp, edging up 0.4 percent to 15.12 yuan, little moved by news that GM had filed for bankruptcy on Monday.

Metal and property stocks were firm for a second day, with Shandong Gold climbing 2.1 percent to 49.98 yuan, while property sector leader Vanke advanced 0.6 percent to 10.22 yuan.

HSI dips 2.64%

Hong Kong shares fell off an eight-month high yesterday as investors deemed blue chips expensive and locked in gains on the recent rally.

The benchmark Hang Seng Index was down 499.51 points at 18389.08, led by a 3.9 percent drop in HSBC, which took a breather after a 25 percent advance in May.

"We can kiss 19000 points goodbye for sometime now. The market has gained way too much and now its time to take a break and return to sanity," said Francis Lun, general manager with Fulbright Securities.

The gauge advanced 17 percent in May and another 4 percent on Monday and is still trading above 16.5 times estimated earnings for 2009.

Turnover inched up to HK$101.9 billion from Monday`s HK$100.3 billion.

Reuters