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Paper makers power index to 4-month high
By Lydia Chen |
March 8, 2011, Tuesday
|
Online Edition
Online Edition
SHANGHAI stock index held up to a nearly four-month high today, with paper makers hiking on the back on rising Chinese currency while profit taking dragged cement producers down.
Analysts said that today's drop was just a hiccup for the market which has outperformed all other Asian bourses since the beginning of February.
The Shanghai Composite Index edged up 0.12 percent to 2,999.94. Turnover declined to 168.66 billion (US$ 25.67 billion) from yesterday's 208 billion.
China's central bank today fixed the yuan's mid-point versus the dollar at 6.5687, slightly weaker from Monday's record of 6.5651, according to the China Foreign Exchange Trading System.
Economists forecast that the Chinese currency is likely to appreciate five to seven percent against the US dollar this year as the government acts to fight against persistent imported inflation.
Paper makers were one of the biggest beneficiaries from the currency rise as the price of imported pulps, which takes up 80 percent of paper manufacturing, would largely decrease in face of a stronger yuan.
Henan Yinge Industrial Investment Holdings Co was the best performer in the market today with a jump of the daily cap of 10 percent to 10.04 yuan.
Chen Kaiwei, an analyst with Changjaing Securities, said the rise among paper makers was a result of sector rotation as investors jump between hot stocks for quick profits.
The rotation left cement makers down today following their stellar gains in previous trading days.
Huaxin Cement Co retreated 2.94 percent to 43.59 yuan.
Chen said the recent rebound will extend till at least Mid-March thanks to ample liquidity in the market.
Tong Bin, an analyst with Guotai Junan agreed. Tong said the market is likely to touch 3,200 points, a correction after last year's fall of 14.3 percent.
Banks will see big price rise in the correction given the fact that Shanghai is going to launch its international board, which will help investors revaluate big caps in the A-share market.
Analysts said that today's drop was just a hiccup for the market which has outperformed all other Asian bourses since the beginning of February.
The Shanghai Composite Index edged up 0.12 percent to 2,999.94. Turnover declined to 168.66 billion (US$ 25.67 billion) from yesterday's 208 billion.
China's central bank today fixed the yuan's mid-point versus the dollar at 6.5687, slightly weaker from Monday's record of 6.5651, according to the China Foreign Exchange Trading System.
Economists forecast that the Chinese currency is likely to appreciate five to seven percent against the US dollar this year as the government acts to fight against persistent imported inflation.
Paper makers were one of the biggest beneficiaries from the currency rise as the price of imported pulps, which takes up 80 percent of paper manufacturing, would largely decrease in face of a stronger yuan.
Henan Yinge Industrial Investment Holdings Co was the best performer in the market today with a jump of the daily cap of 10 percent to 10.04 yuan.
Chen Kaiwei, an analyst with Changjaing Securities, said the rise among paper makers was a result of sector rotation as investors jump between hot stocks for quick profits.
The rotation left cement makers down today following their stellar gains in previous trading days.
Huaxin Cement Co retreated 2.94 percent to 43.59 yuan.
Chen said the recent rebound will extend till at least Mid-March thanks to ample liquidity in the market.
Tong Bin, an analyst with Guotai Junan agreed. Tong said the market is likely to touch 3,200 points, a correction after last year's fall of 14.3 percent.
Banks will see big price rise in the correction given the fact that Shanghai is going to launch its international board, which will help investors revaluate big caps in the A-share market.
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