Copper leads stock advance
Updated: 2011-01-28 08:04
By Irene Shen and Zhang Shidong (China Daily)
An investor keeps an eye on stocks at a brokerage in Haikou, Hainan province. The Shanghai Composite Index climbed 1.49 percent to close at 2749.15 on Thursday. Shi Yan / for China Daily
SHANGHAI - Stocks on the Chinese mainland rose, led by copper producers and automakers, as investors bought shares of companies that will benefit from an improving global economy and are more sheltered from the government's property-price curbs.
Jiangxi Copper Co surged the most in a week as copper prices climbed after US new-home sales beat estimates. Chongqing Changan Automobile Co led an advance for automakers after net income jumped in 2010 as China's economy grew at the fastest pace in three years. China Vanke Co and Poly Real Estate Group Co, the nation's two largest developers, fell by more than 2 percent after the government increased the minimum downpayment for second-home purchases.
"China's growth outlook boosted investors' confidence in companies' earnings," said Tu Jun, a strategist at Shanghai Securities Co. "The market tends to rebound after excessive losses."
The Shanghai Composite Index climbed 1.49 percent to 2749.15 as of the 3 pm close on Thursday, the most since Jan 19. The CSI 300 Index rose 1.61 percent to 3026.47, led by industrial companies and commodity producers.
Jiangxi Copper gained 3.8 percent to 37.96 yuan ($5.77), the biggest increase since Jan 19. Yunnan Copper Industry Co added 5.42 percent to 25.30 yuan.
"Investors are betting on commodity producers on speculation material prices may jump during the Chinese holidays," said Tu. "It has become a tradition for commodity stocks to rise before long vacations."
A gauge of developers in the Shanghai Composite slid 1.2 percent, the only decline among the five industry groups on Thursday. China Vanke slumped 2.47 percent to 8.30 yuan. Poly Real Estate plunged 4.34 percent to 13.24 yuan.
"China will continue to effectively curb investment and speculative purchases of houses to consolidate and expand on previous measures," the State Council said in a statement on its website on Wednesday. It also asked local governments to boost land supply, seeking to further limit the risk of asset bubbles forming in the world's fastest-growing major economy.
Premier Wen Jiabao said on Jan 18 that the government will "resolutely" implement controls on the real-estate market in the first quarter, including curbing speculation and increasing supplies of affordable housing.
Dongfang Electric Corp, China's second-biggest maker of power equipment, jumped by the 10 percent daily limit to 33.34 yuan on Thursday. China International Capital Corp (CICC) boosted Dongfang Electric Corp's 2010 earnings forecast by 21 percent and the 2011 estimate by 27 percent because of rising new orders and higher margins for nuclear power generating equipment, Chen Hua, CICC's analyst, wrote in a report.
(China Daily 01/28/2011 page17)
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