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Shanghai index climbs as investors anticipate Q3 rebound
By Ye Zhen |
June 13, 2012, Wednesday
|
Online Edition
Online Edition
SHANGHAI stocks ended higher today as optimism picked up that China's economy may have bottomed out and will begin to rebound in the third quarter this year.
The benchmark Shanghai Composite Index rose 1.27 percent, or 29.13 points to close at 2,318.92 points. Turnover was 73.9 billion yuan (US$12.4 billion) at the trading close.
A flurry of economic data for May, including trade and new yuan loans, was far ahead of forecasts, alleviating concern the world's second largest economy is heading for a hard landing.
"China's economy may hit bottom this quarter and start to recover in the third quarter," said Li Jing, general manager and chairman of the Chinese securities department of JP Morgan Chase.
With inflationary pressure easing, Li said he expects one more interest rate cut of 25 basis points and one or two cuts in the reserve requirement ratio in the second half of this year.
China's inflation in May eased to 3 percent, the lowest since July 2010. That compares with 3.4 percent in April.
Insurers surged on speculation the government may widen investment options in infrastructure for insurance funds. China Life Insurance, the country's biggest insurer, jumped 7.2 percent to end at 17.88 yuan. Ping An Insurance Co, China's second largest insurer, soared 6.5 percent to 45.28 yuan. China Pacific Insurance (Group) Co gained 6.7 percent to 22.20 yuan.
Electricity producers continued a strong performance. Huaneng Power International Inc surged 5.7 percent to close at 6.26 yuan. GD Power Development Co rose 3.9 percent to 2.66 yuan. Huadian Power International Co added 7.3 percent to 3.82 yuan.
Property developers were mixed. China Vanke, the nation's biggest developer, edged up 0.5 percent to finish at 9.27 yuan. Poly Real Estate, the second largest developer, shed 0.3 percent to 14.59 yuan. Gemdale Corporation lost 0.1 percent to 7.26 yuan.
The benchmark Shanghai Composite Index rose 1.27 percent, or 29.13 points to close at 2,318.92 points. Turnover was 73.9 billion yuan (US$12.4 billion) at the trading close.
A flurry of economic data for May, including trade and new yuan loans, was far ahead of forecasts, alleviating concern the world's second largest economy is heading for a hard landing.
"China's economy may hit bottom this quarter and start to recover in the third quarter," said Li Jing, general manager and chairman of the Chinese securities department of JP Morgan Chase.
With inflationary pressure easing, Li said he expects one more interest rate cut of 25 basis points and one or two cuts in the reserve requirement ratio in the second half of this year.
China's inflation in May eased to 3 percent, the lowest since July 2010. That compares with 3.4 percent in April.
Insurers surged on speculation the government may widen investment options in infrastructure for insurance funds. China Life Insurance, the country's biggest insurer, jumped 7.2 percent to end at 17.88 yuan. Ping An Insurance Co, China's second largest insurer, soared 6.5 percent to 45.28 yuan. China Pacific Insurance (Group) Co gained 6.7 percent to 22.20 yuan.
Electricity producers continued a strong performance. Huaneng Power International Inc surged 5.7 percent to close at 6.26 yuan. GD Power Development Co rose 3.9 percent to 2.66 yuan. Huadian Power International Co added 7.3 percent to 3.82 yuan.
Property developers were mixed. China Vanke, the nation's biggest developer, edged up 0.5 percent to finish at 9.27 yuan. Poly Real Estate, the second largest developer, shed 0.3 percent to 14.59 yuan. Gemdale Corporation lost 0.1 percent to 7.26 yuan.
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