Money

Mainland stocks buck downswing

By Irene Shen (China Daily)
Updated: 2011-03-17 10:04

SHANGHAI - Stocks on the Chinese mainland rebounded on Wednesday from a three-week low after an indicator of the nation's economic outlook advanced and investors speculated that recent declines spurred by Japan's biggest earthquake on record were excessive.

Aluminum Corp of China Ltd surged by 10 percent, erasing a six-day, 7.5 percent drop. Jiangxi Copper Co rose 3.29 percent. Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co jumped to the highest in more than four months after an industry official said domestic demand is rising.

"It's a rebound after the markets overreacted globally," said Wu Kan, a fund manager at Dazhong Insurance Co, which oversees $285 million. "The excessive losses create opportunities for undervalued stocks at the moment."

Related readings:  China stocks close higher Wednesday  China stocks close lower Tuesday  Drugs and steel help markets to rebound  China stocks close higher Monday

The Shanghai Composite Index rose 1.19 percent to 2930.80 at the 3 pm close. The 3.5 percent drop from March 9 to Tuesday drove down estimated earnings for the gauge to 13.6 times, near a record low of 12.9 set in October 2008, according to data compiled by Bloomberg. The CSI 300 Index gained 1.38 percent to 3248.20.

Jiangxi Copper climbed 3.29 percent to 40.24 yuan ($6.12). Yunnan Copper Industry Co added 1.99 percent to 25.66 yuan.

Morgan Stanley boosted its "overweight" allocation for Chinese stocks, saying the likelihood the government will ease policy tightening has increased after the Japanese temblor.

Air China rose 1.33 percent to 11.46 yuan.

Bloomberg News