Real estate sector powers local index to 7-month high
By Feng Jianmin |
November 9, 2010, Tuesday
|
Print Edition
Print Edition
SHANGHAI'S key stock market rose to a seven-month high yesterday on the back of strong performances by property developers and agriculture-related stocks. Metal producers declined.
The benchmark Shanghai Composite Index rose 1 percent, or 30 points, to 3,159.51, the highest close since April 15. Turnover grew to 259.2 billion yuan (US$ 38.9 billion), up from last Friday's 212 billion yuan.
The gains put the index back to the level it reached in mid-April, when China's stock market started to tumble after the central government first stepped up measures to rein in property speculation.
The gauge has risen more than 35 percent since July 2, its low for the year, on an improved economic outlook and abundant liquidity brought by inflation.
Property developers gained after Guotai Junan Securities said that China's housing transaction volume last week climbed 7 percent from the previous week.
Poly Real Estate Co, China's second-largest listed property developer, added 2.2 percent to 15.09 yuan. Shanghai Lujiazui Finance and Trade Zone Development Co climbed 4.8 percent to 22.70 yuan.
"The outlook for property policies is uncertain due to unclear economic growth," said Sun Jianping, an analyst at Guotai Junan Securities. "The property sector may rise on difficulties in levying a property tax."
Agricultural companies gained as futures climbed on a weaker US dollar and high demand while output declined. Prices of cotton futures for May 2011 delivery jumped 7 percent to a record high of 31,235 yuan per ton on China's Zhengzhou market last Friday. Sugar prices also stood at above 30 US cents a pound on the New York market.
Market watchers expect China's inflation in October to exceed 4 percent with the trend continuing into the first half of next year.
Gansu Dunhuang Seed Co jumped 9.94 percent to 38.39 yuan. Gansu Yasheng Industrial Group Co surged 10 percent to 6.47 yuan.
PetroChina, the country's largest oil producer and the firm with the biggest market capitalization on the index, gained 1.25 percent to 12.14 yuan after 157.5 billion of its untradable shares were unlocked yesterday. The shares are worth around 1.9 trillion yuan.
Metal producers retreated on concerns that the US dollar may rebound in the short term, driving metal prices lower.
"The metal sector's growth is limited in the future because of current high prices and a possible stronger US dollar after the Federal Reserve's meeting last week," said Zhang Zhuo, an analyst with Minsheng Securities.
Jiangxi Copper Co, China's largest producer of the metal, fell 2.3 percent to 44.30 yuan. Zijin Mining Group Co, China's largest gold producer, fell 0.7 percent to close at 10.24 yuan.
The benchmark Shanghai Composite Index rose 1 percent, or 30 points, to 3,159.51, the highest close since April 15. Turnover grew to 259.2 billion yuan (US$ 38.9 billion), up from last Friday's 212 billion yuan.
The gains put the index back to the level it reached in mid-April, when China's stock market started to tumble after the central government first stepped up measures to rein in property speculation.
The gauge has risen more than 35 percent since July 2, its low for the year, on an improved economic outlook and abundant liquidity brought by inflation.
Property developers gained after Guotai Junan Securities said that China's housing transaction volume last week climbed 7 percent from the previous week.
Poly Real Estate Co, China's second-largest listed property developer, added 2.2 percent to 15.09 yuan. Shanghai Lujiazui Finance and Trade Zone Development Co climbed 4.8 percent to 22.70 yuan.
"The outlook for property policies is uncertain due to unclear economic growth," said Sun Jianping, an analyst at Guotai Junan Securities. "The property sector may rise on difficulties in levying a property tax."
Agricultural companies gained as futures climbed on a weaker US dollar and high demand while output declined. Prices of cotton futures for May 2011 delivery jumped 7 percent to a record high of 31,235 yuan per ton on China's Zhengzhou market last Friday. Sugar prices also stood at above 30 US cents a pound on the New York market.
Market watchers expect China's inflation in October to exceed 4 percent with the trend continuing into the first half of next year.
Gansu Dunhuang Seed Co jumped 9.94 percent to 38.39 yuan. Gansu Yasheng Industrial Group Co surged 10 percent to 6.47 yuan.
PetroChina, the country's largest oil producer and the firm with the biggest market capitalization on the index, gained 1.25 percent to 12.14 yuan after 157.5 billion of its untradable shares were unlocked yesterday. The shares are worth around 1.9 trillion yuan.
Metal producers retreated on concerns that the US dollar may rebound in the short term, driving metal prices lower.
"The metal sector's growth is limited in the future because of current high prices and a possible stronger US dollar after the Federal Reserve's meeting last week," said Zhang Zhuo, an analyst with Minsheng Securities.
Jiangxi Copper Co, China's largest producer of the metal, fell 2.3 percent to 44.30 yuan. Zijin Mining Group Co, China's largest gold producer, fell 0.7 percent to close at 10.24 yuan.
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