China's main stock index rose 1.33 percent to a record on Tuesday while turnover also hit an all-time high as steel shares surged on a strong earnings forecast by Baosteel. The Shanghai Composite Index closed at 3,444.291 points, less than a tenth of a point off a record high hit earlier in the day.
It has gained 20 percent since the start of March. But a handful of blue chips with strong earnings forecasts accounted for much of the index's rise, and among Shanghai A shares in general, losers outnumbered gainers by 442 to 413.
Turnover in Shanghai A shares ballooned to a heavy 152.3 billion yuan ($19.7 billion) from Monday's 139.3 billion yuan. The previous record turnover was 150.5 billion yuan on March 28. Some traders said the rise in turnover might partly be due to insurance companies. The insurance industry regulator has given insurers permission to double, to 10 percent, the proportion of assets they may hold in domestic equities, industry sources told Reuters on Friday.
Chinese insurers' assets totalled 1.97 trillion yuan at the end of 2006, so the relaxation could theoretically allow as much as 100 billion yuan to flow into the stock market. Hopes that the two Shanghai-listed insurers will make more money from the market may have been behind a jump in their share prices on Monday.
China Life Insurance, which shot up 5.08 percent on Monday, slid 1.51 percent to 36.44 yuan on Tuesday as 300 million shares from the company's January listing became tradable. But Ping An Insurance continued rising, ending up 2.34 percent at 52.82 yuan after hitting an all-time, intra-day high of 53.68 yuan.
Baoshan Iron and Steel, China's top steel maker, gained 4.17 percent to 10.99 yuan and hit an all-time, intra-day high of 11.13 yuan, eclipsing its January peak. It announced on Tuesday it expected to report at least a 150 percent jump in first-quarter net profit, boosted by higher steel prices.
In response, Anyang Iron and Steel rose its 10 percent daily limit to 6.55 yuan. Sinopec Corp rose 2.03 percent to 10.57 yuan after saying it expected January-March net profit to rise by more than half.
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