Shanghai's B shares dive on policy disappointment

SHANGHAI, Nov 24 - Shanghai's dollar-denominated B-share index <.SSEB> plunged more than 8 percent on Tuesday afternoon as investors were disappointed at a lack of market-friendly steps from the government, rumours of which had fanned a nearly 20 percent rally in the market earlier this month.

The B share index was quoted as low as 238.715 points in the afternoon trade, down 8.6 percent from Monday's close as investors pocketed recent gains, propelled by market talk which included rumours that China might merge B shares with the coming international board to be set up for foreign companies listing in Shanghai. "A lack of government market-boosting steps sparked profit-taking today, although we see no major negative news for the market," said a trader at a major Chinese brokerage.

The B-share fall spilled over the the main, yuan-denominated A-share index late in Tuesday's trade, with the benchmark Shanghai Composite Index <.SSEC> down more than 2 percent at one point. (Reporting by Claire Zhang and Edmund Klamann; Writing by Lu Jianxin) ((jianxin.lu@thomsonreuters.com; +86 21 6104 1792; Reuters Messaging: jianxin.lu.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))