Monday, April 13, 2009

China Stocks At Nearly 8-Mth High End Up 2.8 Pct

. Monday, April 13, 2009

By stockOzone team

Chinese stocks climbed 2.84 percent in hectic trade to a nearly eight-month closing high on Monday, led by energy and steel shares as strong economic data released over the weekend fuelled optimism for an early recovery.

The benchmark index gained upward momentum as it breached the 250-day moving average, a key technical resistance level, for the first time in 13 months. The moving average had offered stiff resistance and capped the market's recent rally.

The Shanghai Composite Index closed at 2,513.701 points, its highest closing level since Aug. 20. Gaining Shanghai A shares outnumbered losers by 676 to 226, with over 30 Shanghai A shares soaring by their 10 percent daily limit.

Turnover in Shanghai A shares swelled to 187.3 billion yuan ($27.4 billion), the highest in nearly one year when the index was around 3,500 points, from Friday's 155.1 billion yuan.

Coal industry leader China Shenhua Energy climbed its 10 percent daily limit to 25.09 yuan in heavy trade. Datong Coal also rose its 10 percent limit, to 25.63 yuan.

Traders cited speculation that the companies' parent firms may hike prices in protracted negotiations with electric power producers, although analysts said the situation remained highly uncertain, with any coal price rise likely to depend on whether power producers can raise tariffs or secure government aid.

STEEL SHARES UP
Baoshan Iron and Steel rose 4.01 percent to 5.97 yuan while Wuhan Steel rose its 10 percent limit to 8.03 yuan in record turnover.

PetroChina ( PTR - news - people ) rose 4.01 percent to 11.94 yuan while China COSCO leapt 10 percent to 12.87 yuan.

The Shanghai index has gained 38 percent so far this year while MSCI's world equity index has fallen 4.5 percent, as several economists expect China to recover more quickly than other major economies.

'The upbeat data suggests China's economy is recovering faster than had been expected, so the index is not only buoyed by ample money, which was the major reason pushing up the stock market in the first quarter, but is also drawing confidence from a recovering economy,' said Xiangcai Securities analyst Li Shiming.

Banks extended 1.89 trillion yuan of loans in March, bringing the total for the first quarter to 4.58 trillion yuan, near the government's full-year target of at least 5 trillion yuan.

That helped to lift annual growth in the broad M2 measure of money supply to a record 25.5 percent in March, up from 20.5 percent in February and easily exceeding economists' expectations of a 21.3 percent rise.

'The March loan growth data is surprising and liquidity is expected to remain ample, which could push the index up,' said Western Securities analyst Cao Xuefeng.

($1 = 6.83 Yuan)

Disclosure: Author does not own any of the stocks discussed here.





Bookmark and Share

0 comments:

Post a Comment

 
Visit blogadda.com to discover Indian blogs