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Mainland stocks gain on surge in market sentiment

By Yu Xi (Global Times)

08:20, June 12, 2012

Both the Shanghai and Shenzhen stock markets registered considerable increases Monday after investor confidence got a boost from a wave of positive news, including a rally at the US market Friday, the release of trade data that exceeded market expectations and a deceleration in the growth of China's consumer price index (CPI).

The Shanghai Composite Index expanded 24.41 points, or 1.07 percent, to close at 2,305.86, while the Shenzhen Component Index advanced 142.59 points, or 1.47 percent, to finish at 9,849.77.

Both indices opened higher Monday, hoisted by the aircraft manufacture, aerospace and defense sectors. However, in the morning session, the indices inched down slightly due to contractions in the brewing and cement sectors before rebounding hugely in afternoon trading thanks to strong performances in the heavily weighted securities, real estate and coal sectors.

Chinese exports and imports grew by 15.3 percent and 12.7 percent year-on-year respectively in May, according to data released by the General Administration of Customs over the weekend. At the same time, the combined value of China's imports and exports hit a new record last month, exceeding the previous all-time high set in November 2011.

Meanwhile, most investors took an optimistic stance toward trading Monday as the growth of the CPI for May slowed to 3 percent year-on-year, which will offer further space for the central bank to cut its benchmark deposit and lending rates, analysts said.

"The May economic data are a little better than expected and the government will continue to loosen policies given these figures are still relatively weak," according to a report by Bloomberg Monday, citing Dai Ming, a fund manager at Shanghai Kingsun Investment Management & Consulting Co.

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