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December 22, 2009

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Stocks rise as losing run ends

SHANGHAI'S key stock index ended its losing streak yesterday when it closed slightly higher, led by strong consumer stocks in anticipation that the coming Spring Festival holiday would spark a consumption boom which may boost earnings.

The Shanghai Composite Index added 0.29 percent, or 9.09 points, to close at 3,122.97. Turnover shrank to 90.2 billion yuan (US$13.3 billion) from 116.5 billion yuan last Friday.

Kweichow Moutai Co and Wuliangye Yibin Co, China's top two spirits makers, led as investors viewed last week's drops as excessive compared with their earnings. Moutai rose 1.5 percent to 167.77 yuan after falling 5.5 percent last week and Wuliangye surged 5.4 percent to 29.25 yuan.

"The food and beverage sector is set to outperform the stock market in the near future because the Spring Festival, which falls in mid-February next year, is a traditional consumption peak period," BOZ Research wrote.

Brokerages advanced after Shang Fulin, chairman of the China Securities Regulatory Commission, said the regulator will launch index futures and margin trading at an appropriate time.

Haitong Securities Co, the nation's second-biggest broker, jumped 3.4 percent to 17.88 yuan and Sinolink Securities Co added 1.6 percent to 23.42 yuan.

Lenders dropped after Li Fu'an, a China Banking Regulatory Commission official, said banks may raise 500 billion yuan from the stock market next year to boost capital to lend more.

China Merchants Bank Co shed 2.1 percent to 16.82 yuan while the Bank of Nanjing lost 1.9 percent to 18.6 yuan after saying it plans to raise 5 billion yuan in a rights offer.


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