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Shanghai shares reverse from morning loss
By Lydia Chen |
May 5, 2011, Thursday
|
Online Edition
Online Edition
SHANGHAI stock market rebounded from morning losses and closed higher on strength of defensive picks such as drug makers and consumer staples producers.
But the rebound was considered "short-lived" by Liu Kai, an analyst with Galaxy Securities Co, as he perceived no fundamental changes have yet occurred in the market.
The Shanghai Composite Index edged up 0.22 percent to 2,872.40. Turnover remained thin at 98.81 billion yuan (US$15.20 billion).
"The rebound is more like a slight recovery from yesterday's plunge, which was really overdone," said Liu. "But it doesn't mean the market would head into the positive side soon because those issues that have pressured the market are still there."
The government's tough stance against inflation has not softened as the central bank emphasized this week it will continue to use multiple monetary tightening measures to curb stubbornly high inflation, Liu said.
The concerns on inflation made defensive stocks stand out. Jiangsu Hengrui Medicine Co jumped 3.12 percent to 32.18 yuan.
"Health-care and pharmaceutical sectors could be safe investments now due to their previous hefty losses," Liu said. "These sectors are also likely to see annual net profit growth surpassing 20 percent this year."
But the rebound was considered "short-lived" by Liu Kai, an analyst with Galaxy Securities Co, as he perceived no fundamental changes have yet occurred in the market.
The Shanghai Composite Index edged up 0.22 percent to 2,872.40. Turnover remained thin at 98.81 billion yuan (US$15.20 billion).
"The rebound is more like a slight recovery from yesterday's plunge, which was really overdone," said Liu. "But it doesn't mean the market would head into the positive side soon because those issues that have pressured the market are still there."
The government's tough stance against inflation has not softened as the central bank emphasized this week it will continue to use multiple monetary tightening measures to curb stubbornly high inflation, Liu said.
The concerns on inflation made defensive stocks stand out. Jiangsu Hengrui Medicine Co jumped 3.12 percent to 32.18 yuan.
"Health-care and pharmaceutical sectors could be safe investments now due to their previous hefty losses," Liu said. "These sectors are also likely to see annual net profit growth surpassing 20 percent this year."
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