CHINA’S share indices closed marginally higher Tuesday in thin trade. The sparse volume showed that sentiment was still poor, although worries eased that a looming domestic share issue by China United Telecommunications Group will drain liquidity.

　　“There was some weak technical buying today as liquidity worries over the huge A-share offer by China Unicom Group eased,” said analyst Simon Lai of Shenyin & Wanguo Securities.

　　“But thin volume is a sign of continued poor sentiment, indicating the markets have not reversed the recent weakness.”

　　China United Telecommunications Group, the parent of Hong Kong-listed China Unicom Ltd., said it would raise slightly less than 20 billion yuan (US$2.42 billion) through an A-share initial public offering later this year.

　　The offer will be the largest on China’s mainland bourses, toppling the domestic share issue proceeds record of 11.8 billion yuan set by oil giant Sinopec Corp in 2001. The coming IPO has triggered selling in large caps over the past few days.

　　Sinopec, now the largest capitalized firm on the bourses, accounts for nearly 10 percent of the Shanghai A-share index, and its shares rose 0.55 percent to 3.63 yuan (44 U.S. cents) Tuesday. Brokers said that this is helping stabilize the overall markets.

　　The markets have been declining for more than two weeks due to several negative factors, including frequent issues of A-shares, poor corporate results and a crackdown on market irregularities that has been under way since late 2000.

　　Share prices have entered oversold territory as the benchmark Shanghai composite index fell well below a reading of 30 according to the 14-day Relative Strength Index (RSI), an indication of overselling, analysts said.

　　This may help prevent share indices from falling sharply again in the near term despite weak sentiment, they said.

　　Analysts said the composite index was likely to move between the range of 1,600 and 1,640 points over the next few days. (SD-Agencies)