SHANGHAI (Dow Jones)--China shares ended flat Thursday, as heavyweight financial companies dropped following China Life Insurance's lower-than-expected first-quarter net profit, offsetting gains in metal companies.
The Shanghai Composite Index ended down 2.11 points at 2404.70 and the Shenzhen Composite Index fell 1.62 points to 943.03.
"The market is likely to be stuck in a range bound trading pattern after recent gains," said Everbright Securities analyst Zeng Xianzhao. The Shanghai index has risen 6.3% since the start of this month.
Huatai Securities analyst Li Wenhui said uncertainty about the outlook for listed companies kept investors from chasing the market's rally. Trading volume in Shanghai totaled CNY104.82 billion, down from CNY113.07 billion Wednesday, indicating investors remain cautious.
However, "overall, I think the odds for the upside in the broader market are still big because of low valuation of blue chip companies," he said.
Analysts expect the benchmark Shanghai Composite to trade within a 2400-2450 range in the short term.
Insurance companies fell after China Life said late Wednesday its first-quarter net profit fell 29% from a year earlier to CNY5.63 billion. Analysts had widely expected the country's biggest life insurer by premiums to post higher net profit in the first quartet.
Barclays said the main driver of the profit decline was a worse-than-expected impairment loss of CNY7.7 billion in the January-March period.
"We are somewhat surprised by the size of this impairment charge given the A-share market increased 3% in the first quarter. The company may need to book additional losses if the equity market doesn't recover significantly in 2012," Barclays said.
China Life dropped 1.1% to CNY18.32, New China Life fell 2.2% to CNY34.16, and China Pacific Insurance slid 0.5% to CNY21.81.
Banks fell on profit-taking. China Construction Bank fell 0.4% to CNY4.79 after having risen 1.7% in the previous two sessions and ICBC ended 0.7% lower at CNY4.39 following a 0.7% gain over the same period.
Metals-related counters gained, on expectations for higher demand as the second quarter is traditionally a peak season for the construction sector.
Yunnan Aluminium surged by the 10% daily limit to CNY6.74, Sino-Platinum Metals added 3.9% to CNY19.12 and Zhongjin Lingnan Nonfemet gained 1.2% to CNY9.60.
-Rose Yu and Chao Deng contributed to this article, Dow Jones Newswires; 8621 6120-1200; rose.yu@dowjones.com
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