Stocks rally on call to ease credit
By Feng Jianmin |
July 5, 2011, Tuesday
|
Print Edition
Print Edition
SHANGHAI'S key stock index rose the most in six days, on speculation that China's tight monetary policies may ease after Vice Premier Wang Qishan told financial institutions to relax lending in favor of economic development.
The benchmark Shanghai Composite Index jumped 1.9 percent to 2,812.82 points, the highest close since May 20.
Wang over the weekend urged the country's lenders to increase financing to small businesses in order to ease fundraising difficulties under the country's current policy of monetary tightening.
He said that the current domestic and overseas situation is extremely complicated and uncertain, and "it is very difficult to handle the relationship between economic development, economic restructuring and checking inflation."
Nomura Holdings said in a report that Chinese stocks will offer "buying opportunities" in the second half of this year as valuations have already factored in monetary policy tightening. Also, "less aggressive" interest rate increases, a slowdown in consumer price inflation, more fiscal stimulus and increased efforts to boost investment are expected later in the year, the report said.
Commodity producers and car makers led the gainers.
Gold miners surged despite the gold bullion price falling 1.3 percent last Friday in New York. A report by CITIC Securities said gold will continue to be weak in the short term on a stronger US dollar, but demand for the metal in China will support prices.
Zijin Mining Group Co, China's largest gold producer, jumped by the daily limit of 10 percent to 5.28 yuan (82 US cents). Shandong Gold Mining Co added 3.1 percent to 46.88 yuan.
Nonferrous metal producers were also strong after copper prices recovered to a two-month high in London after concerns over the Greek debt crisis eased. Jiangxi Copper Co climbed 3.9 percent to 36.97 yuan.
Auto sales growth may recover in the second half of this year as liquidity is expected to ease, boosting consumer demand for mid- and high-end passenger cars, Xinhua news agency reported.
The benchmark Shanghai Composite Index jumped 1.9 percent to 2,812.82 points, the highest close since May 20.
Wang over the weekend urged the country's lenders to increase financing to small businesses in order to ease fundraising difficulties under the country's current policy of monetary tightening.
He said that the current domestic and overseas situation is extremely complicated and uncertain, and "it is very difficult to handle the relationship between economic development, economic restructuring and checking inflation."
Nomura Holdings said in a report that Chinese stocks will offer "buying opportunities" in the second half of this year as valuations have already factored in monetary policy tightening. Also, "less aggressive" interest rate increases, a slowdown in consumer price inflation, more fiscal stimulus and increased efforts to boost investment are expected later in the year, the report said.
Commodity producers and car makers led the gainers.
Gold miners surged despite the gold bullion price falling 1.3 percent last Friday in New York. A report by CITIC Securities said gold will continue to be weak in the short term on a stronger US dollar, but demand for the metal in China will support prices.
Zijin Mining Group Co, China's largest gold producer, jumped by the daily limit of 10 percent to 5.28 yuan (82 US cents). Shandong Gold Mining Co added 3.1 percent to 46.88 yuan.
Nonferrous metal producers were also strong after copper prices recovered to a two-month high in London after concerns over the Greek debt crisis eased. Jiangxi Copper Co climbed 3.9 percent to 36.97 yuan.
Auto sales growth may recover in the second half of this year as liquidity is expected to ease, boosting consumer demand for mid- and high-end passenger cars, Xinhua news agency reported.
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