Markets

Benchmark reaches highest in a week

By Irene Shen and Zhang Shidong (China Daily)
Updated: 2010-12-07 09:11

SHANGHAI - China's benchmark stock index rose to the highest in a week as PetroChina Co advanced on the prospect of increasing profit. Consumer companies slid on concern recent gains have been excessive.

PetroChina added 4.72 percent on Monday after BNP Paribas predicted China may encourage the company to supply natural gas to the northeast region by raising prices. Kweichow Moutai Co and SAIC Motor Corp led consumer stocks lower after a central bank adviser said China may further tighten monetary policy to curb capital inflows.

"There's been a decent run-up for consumer stocks and that has pushed their valuations to a very high level," said Wang Zheng, Shanghai-based chief investment officer at Jingxi Investment Management Co, which manages about $120 million. "There's a good reason to sell consumer stocks now because of hefty gains in share prices and poor sentiment in the broader market."

The Shanghai Composite Index added 0.52 percent to 2857.18 at 3 pm on Monday. Among the index's 920 members, 641 retreated, 228 gained and 51 were unchanged.

The CSI 300 Index rose 0.23 percent to 3165.57.

A gauge of energy stocks advanced 1.3 percent, the second most among the 10 industry groups in the CSI 300.

China Petroleum and Chemical Corp gained 1.96 percent to 8.34 yuan ($1.25).

A gauge of consumer staples fell 2.6 percent on Monday, trimming gains over the past three months to 16 percent, the most among the 10 industry groups in the CSI 300.

Related readings:  Benchmark index down Thursday on lending curb fears  Benchmark down for first time in four days  Benchmark bounces back from biggest decline in six weeks  Benchmark sees biggest loss in two weeks

Kweichow Moutai slid 3.39 percent to 193.02 yuan on Monday. Chongqing Brewery slumped 9.34 percent to 65.03 yuan. SAIC Motor led declines for automakers, sliding 1.33 percent to 16.38 yuan. The China Securities Journal reported the nation will scrap a preferential tax for vehicles with engines no larger than 1.6 liters, citing an unidentified person at the National Development and Reform Commission.

China CAMC Engineering Co, an engineering construction company, gained 4.3 percent to 67.46 yuan on Monday, a record high since its listing in 2006. The company said it won 7.15 billion yuan of contracts from Venezuelan companies on Friday to build infrastructure, plant crops, and supply agricultural machines.

Dalian Port Co, a port operator, surged 37.89 percent on Monday from its offer price to 5.24 yuan on the first day of trading in Shanghai. The company raised 2.9 billion yuan in its first-time domestic stock sales.

The Shanghai Composite has fallen 13 percent this year, the worst performer in Asia, on concern record growth in lending and property prices would fuel inflation.

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