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Commodity plays push up Shanghai equity index
By Lydia Chen |
July 14, 2011, Thursday
|
Online Edition
Online Edition
SHANGHAI stocks edged up in an expanded trading volume in the morning session today, powered by commodity producers.
The Shanghai Composite Index added 0.14 percent to 2,799.45. Turnover rose to nearly 71 billion yuan (US$11 billion).
Prices of commodities rallied to a four-week high after United States Federal Reserve Chairman Ben Bernanke indicated more economic stimulus plans could be possible in the future, which is expected to drive down the US dollar and boost demand for raw materials as a hedge against inflation.
Zhongjin Gold climbed 3.04 percent to 29.82 yuan. Jiangxi Copper rose 2.86 percent to 37.10 yuan. Zijing Mining Group hiked 5.70 percent to 5.75 yuan.
Gold climbed to a record and silver surged the most since March 2009 in New York, partly riding on a worsening Europe's debt crisis while the US dollar dropped the most in two weeks against a six-currency basket.
Oil also traded near a four-day high in New York after signs of rising crude demand in the US countered speculation the world's biggest consumer of the commodity may face a credit rating downgrade.
But whether the rally among commodity producers in the Shanghai stock market could be sustained in the afternoon trading is uncertain as banks, the biggest heavyweight sector, are declining over the country's record credit boom.
Bank of China was down 0.32 percent to 3.12 yuan. Bank of Communications lost 0.36 percent to 5.55 yuan.
China issued a record US$2.7 trillion two-year credit boom in awake of a global financial crisis in 2008, including loans to local governments and counties to finance infrastructure projects. The lending spree left the world's second largest economy with 51.4 trillion yuan in outstanding loans by the end of 2010.
Chinese lenders' credit outlook may sour in the absence of a government plan to deal with the issue, Moody's Investors Service said this month.
The Shanghai Composite Index added 0.14 percent to 2,799.45. Turnover rose to nearly 71 billion yuan (US$11 billion).
Prices of commodities rallied to a four-week high after United States Federal Reserve Chairman Ben Bernanke indicated more economic stimulus plans could be possible in the future, which is expected to drive down the US dollar and boost demand for raw materials as a hedge against inflation.
Zhongjin Gold climbed 3.04 percent to 29.82 yuan. Jiangxi Copper rose 2.86 percent to 37.10 yuan. Zijing Mining Group hiked 5.70 percent to 5.75 yuan.
Gold climbed to a record and silver surged the most since March 2009 in New York, partly riding on a worsening Europe's debt crisis while the US dollar dropped the most in two weeks against a six-currency basket.
Oil also traded near a four-day high in New York after signs of rising crude demand in the US countered speculation the world's biggest consumer of the commodity may face a credit rating downgrade.
But whether the rally among commodity producers in the Shanghai stock market could be sustained in the afternoon trading is uncertain as banks, the biggest heavyweight sector, are declining over the country's record credit boom.
Bank of China was down 0.32 percent to 3.12 yuan. Bank of Communications lost 0.36 percent to 5.55 yuan.
China issued a record US$2.7 trillion two-year credit boom in awake of a global financial crisis in 2008, including loans to local governments and counties to finance infrastructure projects. The lending spree left the world's second largest economy with 51.4 trillion yuan in outstanding loans by the end of 2010.
Chinese lenders' credit outlook may sour in the absence of a government plan to deal with the issue, Moody's Investors Service said this month.
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