Interest in banks helps market to end higher
(Shanghai Daily)Updated: 2007-01-27 09:28 Late-afternoon buying in banks helped push Shanghai's benchmark stock index to rebound slightly yesterday, paring an early session decline of nearly five percent.
Analysts said in early trading yesterday, the market was somewhat concerned about a possible interest rate rise after China reported stronger economic data on Thursday, but confidence was restored on hopes of more inflows of capital next week.
A shares and foreign-currency B shares, added 0.88 percent at 2,882.56. It dropped nearly 4.8 percent around 11am.
The index had plunged nearly four percent on Thursday, ending a winning rally early this week that sent the market to record highs.
"I don't think the recent move indicates a downturn, it's only a correction," said Zhang Li, a Huatai Securities analyst. "Excess liquidity, an appreciating yuan, China's economic growth and improving corporate earnings are all supporting the market."
Bank shares rose as analysts said a major fund may buy bank stocks after a lock-up period concerning subscription to Industrial Bank Co's initial public offering expires next week.
China Minsheng Banking Corp and Hua Xia Bank Co surged to the 10 percent daily limit. Shanghai Pudong Development Bank Co advanced 9.07 percent while China Merchants Bank Co rose 6.59 percent.
However, Industrial & Commercial Bank of China Ltd lost 0.38 percent to 5.26 yuan (68 US cents). The country's largest lender said 2.35 billion shares held by institutional investors, or about one percent of its outstanding shares, will start trading on Monday.
Nonferrous metal stocks also rose, led by Yunnan Chihong Zinc & Germanium Co. The zinc producer jumped to the 10 percent daily cap after saying its 2006 net profit may soar eightfold from a year earlier on higher product prices and increased output.
Jiangxi Copper Co added 4.04 percent to 14.69 yuan while Hunan Zhuye Torch Metals Co rose 4.93 percent to 12.34
yuan.
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