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Shares rebound on signs of industrial expansion
By Lydia Chen |
October 24, 2011, Monday
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Online Edition
Online Edition
SHANGHAI stock market posted its strongest rebound in nearly two weeks today on the strength of financials and manufacturing plays after an industrial index showed China's manufacturing might have expanded in October for the first time in four months.
The Shanghai Composite Index jumped 2.29 percent to 2,370.33, the biggest rise since October 12 and the first gain in five trading days. Turnover expanded to 63 billion yuan (US$9.92 billion) from 43.7 billion yuan last Friday.
Financials were one of the biggest gainers today with securities shares rallying after the Securities Times reported China had set up a company in charge of short-selling and margin trading.
CITIC Securities, the country's largest brokerage, gained 3.19 percent to 11.64 yuan. Haitong Securities hiked 6.68 percent to 9.10 yuan.
Manufacturing and copper producers also rallied after the a preliminary purchasing managers' index rebounded to 51.1, the highest in five months, HSBC Holdings Plc and Markit Economics said today.
Jiangxi Copper climbed 4.13 percent to 25.98 yuan. China CSSC Holdings increased 5.79 percent to 33.44 yuan.
However, the reading, which indicates an expansion when above 50, came after Premier Wen Jiabao said over the weekend that China must continue efforts to control food and housing prices to ease soaring inflation and maintain economic development and social stability.
The Shanghai benchmark index has slumped 16 percent so far this year after the central bank raised interest rates three times in 2011 and ordered lenders to set aside a bigger portion of their deposits to curb inflation that's near a three-year high.
Meanwhile, by the end of October 17, a total of 753 out of 1,043 firms listed on the mainland's A-share market said in earning previews that they have seen profit growth from a year ago from July to September while 290 said their year-on-year net profit had declined.
Chen Li, UBS's head of China equity strategy, said mainland stock markets were likely to see another slump in the last quarter with company profit growth expected to fall to the lowest this year during the period.
Average profit growth for non-financial listed firms may fall to merely 7 percent in the last quarter, far short of market expectations of 21 percent, Chen added.
The Shanghai Composite Index jumped 2.29 percent to 2,370.33, the biggest rise since October 12 and the first gain in five trading days. Turnover expanded to 63 billion yuan (US$9.92 billion) from 43.7 billion yuan last Friday.
Financials were one of the biggest gainers today with securities shares rallying after the Securities Times reported China had set up a company in charge of short-selling and margin trading.
CITIC Securities, the country's largest brokerage, gained 3.19 percent to 11.64 yuan. Haitong Securities hiked 6.68 percent to 9.10 yuan.
Manufacturing and copper producers also rallied after the a preliminary purchasing managers' index rebounded to 51.1, the highest in five months, HSBC Holdings Plc and Markit Economics said today.
Jiangxi Copper climbed 4.13 percent to 25.98 yuan. China CSSC Holdings increased 5.79 percent to 33.44 yuan.
However, the reading, which indicates an expansion when above 50, came after Premier Wen Jiabao said over the weekend that China must continue efforts to control food and housing prices to ease soaring inflation and maintain economic development and social stability.
The Shanghai benchmark index has slumped 16 percent so far this year after the central bank raised interest rates three times in 2011 and ordered lenders to set aside a bigger portion of their deposits to curb inflation that's near a three-year high.
Meanwhile, by the end of October 17, a total of 753 out of 1,043 firms listed on the mainland's A-share market said in earning previews that they have seen profit growth from a year ago from July to September while 290 said their year-on-year net profit had declined.
Chen Li, UBS's head of China equity strategy, said mainland stock markets were likely to see another slump in the last quarter with company profit growth expected to fall to the lowest this year during the period.
Average profit growth for non-financial listed firms may fall to merely 7 percent in the last quarter, far short of market expectations of 21 percent, Chen added.
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