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Shanghai index up 3.7% on stimulus moves
By Ye Zhen |
September 7, 2012, Friday
|
Online Edition
Online Edition
SHANGHAI stocks rose the most in nearly eight months after the European Central Bank announced a new bond-buying program and the Chinese government accelerated approvals for new infrastructure projects to revitalize economy.
The key Shanghai Composite Index jumped 3.7 percent, or 75.84 points, to settle at 2,127.76 points, the highest closing in one month. Turnover was 111.1 billion yuan (US$17.6 billion) at the trading close.
European Central Bank President Mario Draghi yesterday announced details of an unlimited bond-buying program to lower borrowing costs and to address distortions in the sovereign bond markets. Qu Hongbin, chief economist for China at HSBC, said the plan was more than expected and will help boost investor confidence.
The Chinese government approved 20 new infrastructure projects, including 13 highway projects totaling more than 2,000 kilometers, the National Development & Reform Commission said yesterday. Plus the 25 subway projects announced on Wednesday, total investment in these projects will top 1 trillion yuan, the biggest stimulus package since October 2008.
As further monetary easing may lead to a rebound in home prices and inflation, the government is resorting to infrastructure investment to shore up economic growth, China Securities said in a report today.
HSBC Holding Plc estimated China's infrastructure investment to increase 20 percent this year to offset slumps in property sales and exports.
Cement producers led the advance among construction-related stocks. Anhui Conch Cement Co, China's biggest cement producer, jumped by the daily limit of 10 percent to 15.07 yuan. Zhejiang Jianfeng Group Co, a building materials supplier, soared 10 percent to 10.67 yuan. Gansu Qilianshan Cement Group Co leaped 10 percent t to 10.56 yuan.
Inner Mongolia Baotou Steel Union Co increased 7 percent to 5.24 yuan. Sinoma International Engineering Co surged 10 percent to 9.59 yuan.
The key Shanghai Composite Index jumped 3.7 percent, or 75.84 points, to settle at 2,127.76 points, the highest closing in one month. Turnover was 111.1 billion yuan (US$17.6 billion) at the trading close.
European Central Bank President Mario Draghi yesterday announced details of an unlimited bond-buying program to lower borrowing costs and to address distortions in the sovereign bond markets. Qu Hongbin, chief economist for China at HSBC, said the plan was more than expected and will help boost investor confidence.
The Chinese government approved 20 new infrastructure projects, including 13 highway projects totaling more than 2,000 kilometers, the National Development & Reform Commission said yesterday. Plus the 25 subway projects announced on Wednesday, total investment in these projects will top 1 trillion yuan, the biggest stimulus package since October 2008.
As further monetary easing may lead to a rebound in home prices and inflation, the government is resorting to infrastructure investment to shore up economic growth, China Securities said in a report today.
HSBC Holding Plc estimated China's infrastructure investment to increase 20 percent this year to offset slumps in property sales and exports.
Cement producers led the advance among construction-related stocks. Anhui Conch Cement Co, China's biggest cement producer, jumped by the daily limit of 10 percent to 15.07 yuan. Zhejiang Jianfeng Group Co, a building materials supplier, soared 10 percent to 10.67 yuan. Gansu Qilianshan Cement Group Co leaped 10 percent t to 10.56 yuan.
Inner Mongolia Baotou Steel Union Co increased 7 percent to 5.24 yuan. Sinoma International Engineering Co surged 10 percent to 9.59 yuan.
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