ALL Chinese indices took it on the chin last week, as the markets continued to drift lower. The Credit Lyonnais Shanghai A index closed on Friday at 4,369.36, from the previous week's close of 4,553. Its B-share counterpart ended at 1,040.02, from the previous Friday's close of 1,129.96. In Shenzhen the A index finished at 1,802.92 compared with 1,891.05 the previous Friday and the B index ended at 1,412.27 compared with 1,455.22. Shanghai A shares plummeted on Friday, with losses on every counter except the local utility Shanghai Shenergy. Brokers said the main reason for the decline was profit-taking by institutions after four days of rises. Rumours that state-owned shares would be listed on the market after the Chinese New Year holiday also depressed sentiment. Brokers said the state still held the bulk of shares in most listed companies, leaving a small fraction on the market that was easily manipulated by big players. Listing state-held shares, or shares now held by institutions, which was being discussed in Beijing, would change the dynamics of the whole market, they said. Trading in mid-week shifted towards stocks from the northeastern part of the country. Brokers said interest was spurred by a seminar that suggested the reason for the weak performance of stocks from that area was that firms failed to made adequate disclosure. Interest was generated during the week by Shanghai Feile taking an additional five per cent stake in Feile Acoustics, in its bid to thwart a hostile takeover by Shenzhen Tianji Guangdian. Shanghai Feile with its 18.9 per cent stake is by far the largest shareholder and analysts believe it will be impossible for Tianji to mount a successful takeover.