Chinese shares closed up 0.72 percent on Tuesday following early lows, due to late bargain hunting in banking and commodity stocks, dealers said. The Shanghai Composite Index, which covers both A and B shares, was up 22.98 points at 3,211.76 on turnover of 117.1 billion yuan (17.1 billion dollars). Analysts said market optimism about corporate earnings had outweighed concerns that the government may take more steps to curb fast-rising property prices.
"I expect the domestic stock market to climb at a slow pace, as China's economy has taken a turn for the better and corporate earnings have been improving," Simon Wang, an analyst at Guoyuan Securities, told Dow Jones Newswires. Banks rose due to investor expectations of strong earnings reports in the coming years, following the sharp increase in lending this year.
Industrial and Commercial Bank of China rose 1.2 percent to 5.28 yuan, Bank of China gained 1.7 percent to 4.23 and China Merchants Bank ended up 2.3 percent at 17.17. Oil majors advanced, with PetroChina up 1.1 percent to 13.55 yuan. Sinopec added 1.3 percent to 13.71. Property developers bucked the uptrend due to continued concerns China will introduce more measures to cool the real estate sector.
China Vanke dropped 0.8 percent to 10.45 yuan, China Merchants Property fell 1.9 percent to 25.91 and Shenzhen Properties and Resources Development ended down 2.4 percent at 10.87. Stocks listed on the Nasdaq-style ChiNext board were mixed. Beijing Cisri-Gaona Materials and Technology rose by the 10 percent daily limit to 34.53 yuan, while Beijing Ultrapower Software fell 4.5 percent to 104.68.
The Shanghai A-share index added 24.19 points, or 0.72 percent, to 3,368.69 on turnover of 116.8 billion yuan, while the Shenzhen A-share index gained 5.25 points, or 0.42 percent, to 1,250.73 on turnover of 77.0 billion yuan. The yuan closed the day at 6.8292 against the US dollar, up from Monday's finish of 6.8299. The Shanghai B-share index added 0.35 points, or 0.14 percent, to 250.49. The Shenzhen B-share index lost 1.44 points, or 0.23 percent, to 613.01.
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