Petrochemical, bank shares drive index up 2.6%
Updated: 2007-12-25 09:53
Chinese stocks closed up for the fourth day in a row today. On a slew of encouraging news, petroleum and banking shares led the market, pushing the major stock index back up to the 5,200-point level, last reached over a month ago.
Stocks in the petrochemical sector contributed the most. The top three oil companies in terms of share base, PetroChina, Sinopec and China Oilfield Services, were up 4.65 percent, 2.94 percent, and 10 percent respectively.
| Shanghai Composite Index |
| Source: www.sina.com.cn |
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Financial stocks were particularly strong. Every bank, insurer, securities house, and trust firm surged. All the 15 listed banks climbed up, in a wave pioneered by Industrial Bank with a 3.65 percent growth, on a better profitability prospective for the coming year. Seventeen commercial banks had together announced last week that they will keep the country's loan growth rate at 18 percent, the same as this year.
The government's effort in curbing mortgage loans took bite, leaving commercial banks worrying about a lack of profit-generating business. However, to their relief, the central bank raised the interest rate again last week, the sixth time this year, taking effect last Friday. The move is likely to encourage more people to deposit savings, helping offset the effect of slowing mortgage loans, said analysts.
Other heavyweight index-drivers, including real estate developers like China Vanke, construction contractors such as China Railway, and logistics giant China Shipping Container Line joined as well. China Unicom, expecting approval of its wish to sell off its CDMA business, continued rising for the fourth consecutive day and closed 4.62 percent up, to 11.09 yuan.
As a result, the benchmark Shanghai Composite Index closed up 132.48 points or 2.6 percent to 5,234.26. Starting higher at 5,132.91, in the first 30 minutes, the index slid to a low of 5,104.65, where it met with support from buying bids and turned around to take off. From then on, it kept edging up on a steady growth path. By the end of the afternoon session, it had hit a high of 5,284.34 and then dropped to the close. Of the A shares, 638 moved upward, while 116 fell and 92 remained unchanged.
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