Market up slightly as banks gain support
By Lydia Chen |
October 12, 2011, Wednesday
|
Print Edition
Print Edition
SHANGHAI stock market edged up yesterday following a market-saving move by a government investment arm which pledged to spend 197 million yuan (US$31 million) buying the shares of China's Big Four banks.
Coal producers narrowed the market's gains after the government announced higher taxes on coking coal.
The Shanghai Composite Index closed up just 0.2 percent at 2,348.52 points after rallying as much as 2.9 percent.
Analysts cautioned that Central Huijin Investment's move is insufficient to turn sentiment around.
Wang Liemin, an analyst with Guosen Securities, said: "The shrink in gains indicates pessimism still dominates the market. Investors are worried China's slowing economic growth will not disappear overnight simply because of Central Huijin's share purchase."
Financials were strong, led by banks after Central Huijin said it is buying shares in the Industrial and Commercial Bank of China, the Agriculture Bank of China, the Bank of China and China Construction Bank, a move considered a bid to support a stock market that has slumped more than 16 percent this year.
ICBC, China's biggest lender, rose 1.5 percent to 4.05 yuan. The AgBank gained 2 percent, and BOC rose 2.1 percent. CCB jumped 2.5 percent.
Wang added: "The shares Central Huijin bought yesterday is far from enough to reverse a sliding trend in the market. It is more like a symbolic move that indicates the central government's judgment that the market has bottomed out."
Central Huijin, a unit of China's sovereign wealth fund, pledged to continue with "related market operations" without providing details on how much or how long it will invest, nor whether it will buy shares in Hong Kong or Shanghai.
China Shenhua Energy Co tumbled 4.2 percent to close at 24.21 yuan. Yanzhou Coal Mining Co dropped 4.9 percent to 27.83 yuan.
Coal producers narrowed the market's gains after the government announced higher taxes on coking coal.
The Shanghai Composite Index closed up just 0.2 percent at 2,348.52 points after rallying as much as 2.9 percent.
Analysts cautioned that Central Huijin Investment's move is insufficient to turn sentiment around.
Wang Liemin, an analyst with Guosen Securities, said: "The shrink in gains indicates pessimism still dominates the market. Investors are worried China's slowing economic growth will not disappear overnight simply because of Central Huijin's share purchase."
Financials were strong, led by banks after Central Huijin said it is buying shares in the Industrial and Commercial Bank of China, the Agriculture Bank of China, the Bank of China and China Construction Bank, a move considered a bid to support a stock market that has slumped more than 16 percent this year.
ICBC, China's biggest lender, rose 1.5 percent to 4.05 yuan. The AgBank gained 2 percent, and BOC rose 2.1 percent. CCB jumped 2.5 percent.
Wang added: "The shares Central Huijin bought yesterday is far from enough to reverse a sliding trend in the market. It is more like a symbolic move that indicates the central government's judgment that the market has bottomed out."
Central Huijin, a unit of China's sovereign wealth fund, pledged to continue with "related market operations" without providing details on how much or how long it will invest, nor whether it will buy shares in Hong Kong or Shanghai.
China Shenhua Energy Co tumbled 4.2 percent to close at 24.21 yuan. Yanzhou Coal Mining Co dropped 4.9 percent to 27.83 yuan.
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