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Stocks post biggest rally in a year
By Lydia Chen |
October 12, 2011, Wednesday
|
Online Edition
Online Edition
SHANGHAI shares posted their biggest daily gain in a year today, powered by a cross-board rally led by financials and developers, on speculation that the government may reveal more market-saving measures.
The Shanghai Composite Index jumped 3.04 percent to 2,420. Turnover rose to nearly 84.5 billion yuan (US$13.3 billion) compared to 62.8 billion yuan yesterday.
Market analysts gave mixed reactions to the biggest daily rise since October 15 last year. Shenyin Wanguo Securities cautioned that the jump was merely a recovery rebound from previous hefty falls, while others argued that China might come up with more measures to spur the market that has slumped nearly 17 percent so far this year.
Banks extended yesterday's climb after Central Huijin Investment Ltd, a state-run investment arm, began buying shares of the top four financial institutions.
The Industrial & Commercial Bank of China, the nation's largest lender, added 1.73 percent to 4.12 yuan.
Haitong Securities Co led a rally for brokerages after Xinhua news agency reported regulators have approved cross-border exchange-traded funds. The ETF for Hong Kong's market is expected to be launched by the end of this year, followed by those focusing on western markets, the report cited unidentified sources as saying today.
Train makers CSR Corp jumped almost 4 percent in early trade and China CNR Corp rallied 5.15 percent. The nation's two biggest train makers advanced after 21st Century Business Herald reported their parent companies could possibly each receive a 2 billion yuan cash injection from the government.
"The move by Huijin is not merely a gesture," said Shen Zhengyang, an analyst with Northeast Securities. "There will be more moves from the government's side, including a lowering of the bank reserve ratio and special monetary easing policies to designated industries," he added.
But analysts with Shenyin Wanguo considered the prospects to be less than rosy. The local brokerage house said in a note today that the market was expected to repeat its performance in August and September when daily big rises were followed by slumps.
The Shanghai Composite Index jumped 3.04 percent to 2,420. Turnover rose to nearly 84.5 billion yuan (US$13.3 billion) compared to 62.8 billion yuan yesterday.
Market analysts gave mixed reactions to the biggest daily rise since October 15 last year. Shenyin Wanguo Securities cautioned that the jump was merely a recovery rebound from previous hefty falls, while others argued that China might come up with more measures to spur the market that has slumped nearly 17 percent so far this year.
Banks extended yesterday's climb after Central Huijin Investment Ltd, a state-run investment arm, began buying shares of the top four financial institutions.
The Industrial & Commercial Bank of China, the nation's largest lender, added 1.73 percent to 4.12 yuan.
Haitong Securities Co led a rally for brokerages after Xinhua news agency reported regulators have approved cross-border exchange-traded funds. The ETF for Hong Kong's market is expected to be launched by the end of this year, followed by those focusing on western markets, the report cited unidentified sources as saying today.
Train makers CSR Corp jumped almost 4 percent in early trade and China CNR Corp rallied 5.15 percent. The nation's two biggest train makers advanced after 21st Century Business Herald reported their parent companies could possibly each receive a 2 billion yuan cash injection from the government.
"The move by Huijin is not merely a gesture," said Shen Zhengyang, an analyst with Northeast Securities. "There will be more moves from the government's side, including a lowering of the bank reserve ratio and special monetary easing policies to designated industries," he added.
But analysts with Shenyin Wanguo considered the prospects to be less than rosy. The local brokerage house said in a note today that the market was expected to repeat its performance in August and September when daily big rises were followed by slumps.
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