China's stock market rose 1 percent on Thursday to a one-month closing high, led by coal and non-ferrous metals shares while the pharmaceutical sector got a boost from healthcare reforms. The Shanghai Composite Index ended at 2,004.951 points, shrugging off sluggishness earlier in the session that followed widely expected weak readings in key economic data.
A slump in annual GDP growth to 6.8 percent in the fourth quarter from 9.0 percent in the third. Turnover in Shanghai A shares was 66.3 billion yuan ($9.7 billion), down slightly from 68.0 billion yuan on Wednesday. Gaining Shanghai A shares outnumbered losers by 703 to 207.
Analysts said that as investors expect the fourth quarter of 2008 and the first quarter this year to be the worst in the current slowdown, there was optimism the government's stimulus steps to bolster the economy would filter through quickly.
"Both sentiment and technical signs are improving, but given that the 2,000 mark is a strong resistance for the market, the index is expected to consolidate around that level for days," said Li Shiming, analyst at Xiangcai Securities.
Coal shares were strong, with Taiyuan Coal Gasification, jumping its 10 percent daily limit to 12.01 yuan in the heaviest trade since December 4 after estimating its net profit in 2008 would grow by 136 to 154 percent. China Shenhua Energy advanced 4.38 percent to 20.24 yuan, underpinned by news earlier this week that its commercial coal production rose 17.5 percent in 2008 and coal sales increased 11.3 percent.
Non-ferrous metals shares were also active, as local media reported that the industry might be among those to receive government support. Western Mining jumped 6.13 percent to 7.96 yuan while Aluminium Corp of China Ltd (Chalco) climbed 4.87 percent to 7.11 yuan.
"The data announced today was as expected. Investors are looking to the future, seeking out industries that could benefit from government aid," said Zhou Lin, analyst at Huatai Securities. Beijing Wandong Medical Equipment, Topchoice Medical Investment, Shinva Medical Instrument soared their 10 percent daily limit. China plans to spend about 850 billion yuan on healthcare reforms over the next three years, according to a cabinet blueprint for change in the sector.
Financial and property shares were mixed. Industrial & Commercial Bank of China, the country's biggest bank, edged up 0.27 percent to 3.69 yuan while China Vanke, the country's largest listed property firm, rose 0.42 percent to 7.13 yuan. Jiangsu Shenlong Hi-tech Group fell 2.08 percent to 2.35 yuan after warning that it expected to post a loss for 2008.