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Key index gains but Mid-East woes hover
By Lydia Chen |
February 24, 2011, Thursday
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Print Edition
Print Edition
SHANGHAI'S key stock index edged up yesterday, but the gains, led by paper producers and commodity firms, were narrowed by market heavyweights such as oil producers whose output may be interrupted by the worsening crisis in Libya and other parts of the Middle East.
The Shanghai Composite Index ended 0.25 percent higher at 2,862.63. Turnover fell sharply to 138 billion yuan (US$21 billion) from Tuesday's 192 billion yuan.
Commodities, particularly gold, continued to outperform the market as investors preferred the precious metal as a safe haven and a hedge against surging oil prices, fueled by the escalating unrest in the Middle East.
Gold topped US$1,400 an ounce in New York while silver soared to the highest in 30 years amid the unrest in Libya.
"Commodities such as gold, copper and nonferrous metals are good investments amid instability," said Hu Jia, an analyst at Orient Securities Co. "Investors prefer precious metals as they act as a hedge against rising inflation."
Zhongjin Gold jumped 4.8 percent to 38.60 yuan, and Shandong Gold Co soared 5.2 percent to 51.07 yuan.
Hu was confident the index will rebound to above 3,000 points.
"The current tight liquidity situation will ease when 687 billion yuan worth of bank bills are due in March," he added.
Shares of paper firms also rose as investors chased them after neglecting the sector for a long time, analysts said.
Fujian Nanzhi Co added 3.74 percent to end at 5.82 yuan. Yueyang Paper Co gained 3.63 percent to close at 9.43 yuan.
The Shanghai Composite Index ended 0.25 percent higher at 2,862.63. Turnover fell sharply to 138 billion yuan (US$21 billion) from Tuesday's 192 billion yuan.
Commodities, particularly gold, continued to outperform the market as investors preferred the precious metal as a safe haven and a hedge against surging oil prices, fueled by the escalating unrest in the Middle East.
Gold topped US$1,400 an ounce in New York while silver soared to the highest in 30 years amid the unrest in Libya.
"Commodities such as gold, copper and nonferrous metals are good investments amid instability," said Hu Jia, an analyst at Orient Securities Co. "Investors prefer precious metals as they act as a hedge against rising inflation."
Zhongjin Gold jumped 4.8 percent to 38.60 yuan, and Shandong Gold Co soared 5.2 percent to 51.07 yuan.
Hu was confident the index will rebound to above 3,000 points.
"The current tight liquidity situation will ease when 687 billion yuan worth of bank bills are due in March," he added.
Shares of paper firms also rose as investors chased them after neglecting the sector for a long time, analysts said.
Fujian Nanzhi Co added 3.74 percent to end at 5.82 yuan. Yueyang Paper Co gained 3.63 percent to close at 9.43 yuan.
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