China stocks surge

Chinas main stock index surged in heavy trade on Thursday, led by coal shares, as ample liquidity in Chinese capital markets continued to encourage buying of shares by short-term speculators. The Shanghai Composite Index ended up 1.89 percent at a three-week closing high of 2,265.759 points, near the days high of 2,268.144. It was the indexs fourth straight daily rise.
Top coal producer China Shenhua Energy advanced 4.25 percent to 20.59 yuan, aided by firmer global energy prices. "The market is mainly being pushed up by an influx of money rather than any special positive news," said Li Wenhui, analyst at Huatai Securities, adding that immediate resistance lay at 2,300 points. Many analysts see technical resistance at that level, where the late February peak roughly coincides with the 200-day average.
Further resistance is around 2,400 points, the February peak; a bullish symmetrical triangle, triggered this week and formed by the highs and lows since mid-February, points up to that level. Gaining Shanghai A shares overwhelmed losers by 885 to 47 on Thursday, while turnover in Shanghai A shares was 127.3 billion yuan ($18.6 billion) against 125.5 billion yuan on Wednesday. "More money is being lured into the market, which seems unlikely to drop for the moment," said Zhang Qi, analyst at Haitong Securities.
But he added that given expectations for poor first-quarter corporate earnings and the lack so far of unambiguous signs of a Chinese economic recovery, the market could face another sharp bout of profit-taking near 2,400 points. Shares of several Shanghai-based firms surged on talk that the city government would step up its efforts to reorganise and strengthen local companies controlled by city authorities. Property firm Lujiazui Finance & Trade Zone Development Co jumped its 10 percent daily limit to 22.23 yuan.
Cookware maker Zhejiang Supor climbed 6.09 percent to 14.63 yuan after posting a 38 percent jump in 2008 net profit, while revenue grew 23 percent. Non-ferrous metals stayed firm after leading gains earlier this week. Jiangxi Copper climbed 2.94 percent to 20.30 yuan after gaining 16 percent in the previous two sessions on the back of rising global copper prices. Shandong Gold rose 7.89 percent to 74.43 yuan after the global spot gold price hit a two-week high on Wednesday, in response to the US Federal Reserves easing of quantitative monetarypolicy.