Stocks high as service industry expands
By Feng Jianmin |
July 6, 2011, Wednesday
|
Print Edition
Print Edition
SHANGHAI'S key stock index yesterday edged up slightly to close at the highest level in six weeks after service industries expanded at the second-fastest pace this year, supporting growth amid the government's campaign to cool inflation.
The benchmark Shanghai Composite Index edged up 0.1 percent to 2,816.36 points, the highest close since May 20.
China's services industries expanded in June at the second-fastest pace this year, outperforming the manufacturing industry, as it was less hard hit by tightening measures and boosted by the star role services now play in the country's economic restructuring.
The HSBC Business Activity Index released yesterday, a seasonally adjusted gauge of service sector in China, was 54.1 points in June, compared with 54.3 in May. In comparison, the HSBC Purchasing Managers' Index, which measures the vitality of industrial activities, fell to an 11-month low of 50.1 points in June, nearly touching 50 points which separate expansion from contraction.
"There is some profit taking after a large rebound yesterday, but market sentiment is still high with strong growth in topical sectors," said Nanjing Securities analyst Wen Lijun. A SWS MU Fund Management Co report recommended buying shares with low valuations such as banks, property developers and steel makers.
It also suggested that some new-industry firms and drug makers will outperform the market in the latter half of the third quarter.
Cement producers rose on construction plans for China's massive affordable homes scheme. A Shanxi Securities report recommended buying cement firms due to the sector's low valuation.
Banks fell after Moody's said in a report yesterday that the scale of problem loans at Chinese lenders is probably larger than the official figure of 10.7 trillion yuan.
The benchmark Shanghai Composite Index edged up 0.1 percent to 2,816.36 points, the highest close since May 20.
China's services industries expanded in June at the second-fastest pace this year, outperforming the manufacturing industry, as it was less hard hit by tightening measures and boosted by the star role services now play in the country's economic restructuring.
The HSBC Business Activity Index released yesterday, a seasonally adjusted gauge of service sector in China, was 54.1 points in June, compared with 54.3 in May. In comparison, the HSBC Purchasing Managers' Index, which measures the vitality of industrial activities, fell to an 11-month low of 50.1 points in June, nearly touching 50 points which separate expansion from contraction.
"There is some profit taking after a large rebound yesterday, but market sentiment is still high with strong growth in topical sectors," said Nanjing Securities analyst Wen Lijun. A SWS MU Fund Management Co report recommended buying shares with low valuations such as banks, property developers and steel makers.
It also suggested that some new-industry firms and drug makers will outperform the market in the latter half of the third quarter.
Cement producers rose on construction plans for China's massive affordable homes scheme. A Shanxi Securities report recommended buying cement firms due to the sector's low valuation.
Banks fell after Moody's said in a report yesterday that the scale of problem loans at Chinese lenders is probably larger than the official figure of 10.7 trillion yuan.
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