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Index rebounds to 1-month high
By Lydia Chen |
February 11, 2011, Friday
|
Print Edition
Print Edition
SHANGHAI stocks rebounded to a nearly one-month high yesterday, led by auto makers and agriculture shares, as fears of tightening measures eased after the latest interest rate increases.
The benchmark Shanghai Composite Index jumped 1.6 percent, the biggest daily gain in nearly two weeks, to 2,818.16, the highest since January 14. Turnover grew to 117.15 billion yuan (US$17.80 billion) from 104.84 billion yuan on Wednesday.
The rally prompted analysts to expect the market to recoup the 3,000 level by the end of the first quarter as concerns over high inflation have already been digested.
Another interest rate hike is not likely in the short term while market liquidity is stable in the first quarter, said Chen Kaiwei, an analyst of Changjiang Securities.
Auto makers and biological medicine makers gained the most as they recovered from a long streak of losses. Shanghai-based SAIC Motor Corp, China's biggest auto maker, surged 10 percent to 18.37 yuan. Jointown Pharmaceutical Group Co also jumped by the daily cap of 10 percent to 14.47 yuan.
Chen rated auto makers, home appliance producers and chemical firms as a buy due to their low valuations and bright earning prospects. "These second-tier blue chips are now ideal when investors feel uncertain about the prospects of big caps such as banks and developers, which are affected by the central government's tightening policies," Chen said.
Agriculture and Internet-related shares rose due to preferential policies. Zhejiang Qianjiang Biochem, which makes agricultural chemicals, and Zhejiang Gangtai Holding (Group) Co, a networking product maker, both posted a 10 percent increase.
The benchmark Shanghai Composite Index jumped 1.6 percent, the biggest daily gain in nearly two weeks, to 2,818.16, the highest since January 14. Turnover grew to 117.15 billion yuan (US$17.80 billion) from 104.84 billion yuan on Wednesday.
The rally prompted analysts to expect the market to recoup the 3,000 level by the end of the first quarter as concerns over high inflation have already been digested.
Another interest rate hike is not likely in the short term while market liquidity is stable in the first quarter, said Chen Kaiwei, an analyst of Changjiang Securities.
Auto makers and biological medicine makers gained the most as they recovered from a long streak of losses. Shanghai-based SAIC Motor Corp, China's biggest auto maker, surged 10 percent to 18.37 yuan. Jointown Pharmaceutical Group Co also jumped by the daily cap of 10 percent to 14.47 yuan.
Chen rated auto makers, home appliance producers and chemical firms as a buy due to their low valuations and bright earning prospects. "These second-tier blue chips are now ideal when investors feel uncertain about the prospects of big caps such as banks and developers, which are affected by the central government's tightening policies," Chen said.
Agriculture and Internet-related shares rose due to preferential policies. Zhejiang Qianjiang Biochem, which makes agricultural chemicals, and Zhejiang Gangtai Holding (Group) Co, a networking product maker, both posted a 10 percent increase.
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