Chinese shares closed 1.3 percent higher on Wednesday, with metals stocks posting solid gains as investors hoped lower raw material costs would bring higher profits for producers.
The benchmark Shanghai composite index closed at 1,616.410 points. Turnover in Shanghai A-shares was a moderate 15.2 billion yuan ($1.9 billion), up from 10.9 billion yuan on Tuesday when trading volumes were at their lowest level since end-March.
Analysts said they expected the index to trade around 1,600 points in the near term, with resistance at 1,650 points. Baotou Aluminium Co closed at 7.79 yuan, up by its daily limit of 10 percent. Lanzhou Aluminium Co also rose a strong 5.31 percent to 7.74 yuan. Among other counters in the metals sector, Jiangxi Copper Co, China's largest copper producer, was up 3.69 percent at 10.40 yuan, while Yunnan Copper gained 3.48 percent to 10.40 yuan.
One major indicator, the Shanghai listing of Air China after a troubled share offer, is due to occur by next Tuesday, and many players are unwilling to trade heavily until they see whether the stock falls below its IPO price.
Daqin Railway Co Ltd, which in July completed China's second biggest IPO, rose 1.93 percent to 5.80 yuan. Shares in Bank of China closed 1.53 higher to 3.32 yuan.
CITIC Securities, China's largest brokerage by net assets, said net profit jumped nearly 10-fold in the first half, buoyed by a recovering stock market. But its shares ended at 12.70 yuan, down 0.78 percent, as traders expected sluggish second-half growth.
China's Huaxia Bank Co Ltd, Deutsche Bank's strategic partner in China, gained 2.59 percent at 3.96 yuan after it announced a 16.41 percent rise in net profit for the first half of 2006. It will reveal complete results for the first half later this month.
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