AIRLINK 207.05 Decreased By ▼ -5.77 (-2.71%)
BOP 10.25 No Change ▼ 0.00 (0%)
CNERGY 6.77 Decreased By ▼ -0.23 (-3.29%)
FCCL 33.59 Increased By ▲ 0.12 (0.36%)
FFL 16.97 Decreased By ▼ -0.67 (-3.8%)
FLYNG 21.60 Decreased By ▼ -0.22 (-1.01%)
HUBC 129.23 Increased By ▲ 0.12 (0.09%)
HUMNL 14.06 Increased By ▲ 0.20 (1.44%)
KEL 4.72 Decreased By ▼ -0.14 (-2.88%)
KOSM 6.85 Decreased By ▼ -0.08 (-1.15%)
MLCF 42.90 Decreased By ▼ -0.73 (-1.67%)
OGDC 216.10 Increased By ▲ 3.15 (1.48%)
PACE 7.14 Decreased By ▼ -0.08 (-1.11%)
PAEL 42.00 Increased By ▲ 0.83 (2.02%)
PIAHCLA 16.90 Increased By ▲ 0.07 (0.42%)
PIBTL 8.44 Decreased By ▼ -0.19 (-2.2%)
POWER 8.81 No Change ▼ 0.00 (0%)
PPL 185.40 Increased By ▲ 2.37 (1.29%)
PRL 39.40 Decreased By ▼ -0.23 (-0.58%)
PTC 24.85 Increased By ▲ 0.12 (0.49%)
SEARL 98.02 Increased By ▲ 0.01 (0.01%)
SILK 1.02 Increased By ▲ 0.01 (0.99%)
SSGC 40.80 Decreased By ▼ -0.93 (-2.23%)
SYM 18.40 Decreased By ▼ -0.46 (-2.44%)
TELE 9.17 Increased By ▲ 0.17 (1.89%)
TPLP 12.25 Decreased By ▼ -0.15 (-1.21%)
TRG 64.96 Decreased By ▼ -0.72 (-1.1%)
WAVESAPP 10.86 Decreased By ▼ -0.12 (-1.09%)
WTL 1.84 Increased By ▲ 0.05 (2.79%)
YOUW 4.06 Increased By ▲ 0.03 (0.74%)
BR100 11,840 Decreased By -26.4 (-0.22%)
BR30 35,890 Increased By 193 (0.54%)
KSE100 113,880 Decreased By -268.1 (-0.23%)
KSE30 35,848 Decreased By -104.5 (-0.29%)

China's stock market jumped nearly 4 percent in heavy trade on Friday, posting a weekly gain of almost 10 percent, on the back of hopes for an early recovery of the Chinese economy. The Shanghai Composite Index closed up 3.97 percent at 2,181.239 points, its highest level since early October. Its weekly gain of 9.57 percent was the biggest since mid-November.
Stocks and Chinese bond yields have surged this week, and the yuan has jumped against the dollar in the offshore forwards market, on news of an improving China purchasing managers' index (PMI) and strong growth in bank loans. The data do not so far indicate a strong, sustainable recovery of the economy - the January PMI remained below its neutral line of 50, and the lending rise occurred because of government pressure on banks, which could add to their bad loans.
But investors have been piling back into the stock market, worried that they might miss an uptrend. Cyclical stocks which could benefit most from economic recovery outperformed on Friday, with SAIC Motor, the biggest auto maker, climbing 4.88 percent to 7.51 yuan. "Chasing this uptrend is risky, but everybody is scared of missing out on it so they're piling into the market every day," said Huatai Securities analyst Zhou Lin said.
Rising Shanghai A shares overwhelmed falling stocks by 902 to 42 on Friday, while turnover in Shanghai A shares was very strong at 120.3 billion yuan ($17.6 billion), though it was down slightly from Thursday's eight-month high of 124.1 billion yuan. Propelled by government efforts to rescue the economy and the market, including a massive economic stimulus plan and buying of bank shares by a government fund, the main stock index has now recovered 31 percent from a two-year low hit last October.
It remains far below a record high of 6,124 points reached in October 2007. Even if the economy does recover, analysts believe heavy potential supply of shares due to the expiry of lock-up periods for institutional investors may stifle any market rally in the longer term.
But Zhou and others said that with mutual funds, insurers and some foreign institutional investors returning to the market, its uptrend might continue for some weeks. The index's rise on Friday took it well above technical resistance at the December peak of 2,100 points. Some analysts see the next major resistance at the late September peak of 2,333 points.
Other cyclical stocks to benefit on Friday included metal miners, with Zijin Mining up 8.59 percent to 6.32 yuan and Western Mining up 8.02 percent to 9.70 yuan. Copper producers surged, with Jiangxi Copper up its 10 percent daily limit to 15.22 yuan, as Shanghai copper futures rose for a fourth straight day on hopes for a recovery of demand.

Copyright Reuters, 2009

Comments

Comments are closed.