Equities edge up led by banks

09:24, November 26, 2009      

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The benchmark stock index rebounded from its biggest loss in almost three months yesterday on speculation Tuesday's decline was excessive relative to earnings prospects.

SAIC Motor Co rallied 2.9 percent to 25.04 yuan while Jiangxi Copper Co added 3.8 percent to 43.89 yuan.

The Shanghai Composite Index rose 66.64, or 2.07 percent, to close at 3290.17, after changing direction at least nine times. The measure plunged 3.5 percent on Tuesday, the most since Aug 31, on concern banks will sell more shares to replenish capital.

The CSI 300 Index advanced 2.3 percent to 3629.63.

"The bull market in China is still underway," said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors, which oversees about $89 billion in assets. "Any pullbacks present opportunities for investors who missed out on the earlier rally to get in."

The Shanghai index had rallied 20 percent this quarter before Tuesday's drop, the second-best performer among 89 global benchmark gauges tracked by Bloomberg. It's up 81 percent in 2009.

Banks erased earlier losses. Bank of China Ltd gained 0.7 percent to 4.28 yuan, after dropping 2.6 percent earlier.

Industrial & Commercial Bank of China Ltd added 0.2 percent to 5.33 yuan, reversing a previous 2.4 percent slide.

"We're in a transition phase," said AMP's Oliver. "So whenever there is a rumor about banks having to raise capital or potential monetary tightening, that's going to cause a bit of ripples through the market."

Zijin Mining Group Co, the nation's largest gold producer, surged 6.5 percent to 10.98 yuan as bullion climbed to a record for a second time this week.

Shandong Gold Mining Co advanced 10 percent to 84.39 yuan. Zhongjin Gold Co added 5.4 percent to 63.93 yuan.

Bullion for immediate delivery reached a record $1,177.40 an ounce.

Hang Seng advances

Hong Kong shares erased earlier losses to end up 0.84 percent yesterday, led by insurers and consumer stocks, after the Shanghai market rose in a bout of late-session bargain-hunting.

The benchmark Hang Seng Index closed up 188.66 points at 22611.80.

The China Enterprises Index of top locally listed mainland stocks rose 0.57 percent to 13446.09.

Source: China Daily
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