Mainland stocks hit highest in 7 weeks
Updated: 2012-05-04 07:59
By Bloomberg News in Singapore (China Daily)
Stocks on the Chinese mainland rose, sending the benchmark index to a seven-week high, on speculation the government will take steps to avoid a deeper economic slowdown.
China Eastern Airlines Corp and China Southern Airlines Co gained at least 0.8 percent after the China Business News said jet fuel prices fell. Bank of China Ltd and China Construction Bank Corp retreated after Temasek Holdings Pte, Singapore's state-owned investment company, sold $2.48 billion of Hong Kong-traded shares in the two banks.
The Shanghai Composite Index rose 1.64 points, or less than 0.1 percent, to 2,440.08 after changing direction more than 30 times, closing at the highest level since March 13. The CSI 300 Index advanced 0.3 percent to 2,691.52.
"Investors are in a dilemma," said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co, which oversees $285 million. "On one hand, there's constant speculation about policy easing so there's hope looking forward. But fundamentals for the overall economy remain weak."
The Oriental Morning Post said the central bank may cut the reserve ratio for banks as early as this week. China has reduced reserve requirements for banks twice since November, though it has kept benchmark rates on hold since July at the highest level since 2008.
China's non-manufacturing industries grew at a slower pace in April, a survey indicated. A purchasing managers' index was at 56.1, with a reading above 50 indicating an expansion, the National Bureau of Statistics and China Federation of Logistics and Purchasing said in a statement on Thursday in Beijing. That compares with 58 for March.
US companies added 119,000 workers in April, the fewest in seven months, according to data from a private survey.
The jobless rate in the eurozone rose to 10.9 percent in March, manufacturing contracted last month and unemployment in Germany unexpectedly increased, reports showed.
The Shanghai index has climbed 10.9 percent this year amid speculation the government will take measures to boost the economy.
China Construction Bank slid 0.8 percent to 4.73 yuan (75 cents). Bank of China lost 0.3 percent to 3.06 yuan.
Temasek is selling about $1.2 billion of Bank of China shares at HK$3.13 (40 cents) to HK$3.18 apiece, a discount of as much as 4 percent to its closing price on Wednesday in Hong Kong, according to term sheets. The company is also selling about 1.6 billion shares in China Construction Bank at HK$5.99 to HK$6.10 apiece, the documents show.
China Eastern Airlines rose 1.7 percent to 4.24 yuan. China Southern Airlines advanced 0.8 percent to 5.02 yuan. May domestic jet fuel prices fell to 7,932 yuan a ton, from 8,061 yuan in April, China Business News said, citing airlines.
Western Securities Co, a brokerage, gained 67 percent in its debut on Shenzhen's stock exchange.
(China Daily 05/04/2012 page16)