| Chinese shares up for 7th straight day, currency also rises |
| Thursday,June 14,2007 Posted: 07:33 BJT(2333 GMT) Xinhua |
BEIJING, June 13 -- China's key stock index rose 2.56 percent on Wednesday, moving up for the seventh consecutive trading session, with bank shares getting a boost by a sharp appreciation of the country's currency. The benchmark Shanghai Composite Index, which covers both A- and B-shares listed on the Shanghai Stock Exchange, climbed 104.34points to close at 4,176.48 on turnover of 223.9 billion yuan (29.4 billion U.S. dollars). Analysts said the shares post strong gains as worries over interest rate hikes in the near future eased after the release of the lower-than-expected consumer price inflation in May on Tuesday. China's consumer price index (CPI) rose 3.4 percent in May compared with the same month last year, lower than 3.6 percent forecasted by Shenyin & Wanguo Securities and 3.5 percent by the Industrial Securities. Zhou Wangjun, deputy director of the pricing department of the National Development and Reform Commission, said the rise in the CPI will not trigger inflation as food prices are not expected to post further sharp rises and prices of industrial products and services remain stable. Ha Jiming, chief economist with China International Capital Corporation Limited, says there is little chance of further interest rate increases in the short term. "The central bank might raise the amount of money the commercial banks must hold in reserves as the last interest rate hike was less than a month ago," the Beijing News quoted Ha as saying on Wednesday. Li Huiyong, an analyst at Shenyin & Wanguo Securities, said the central bank might raise the interest rate before or after the release of the second quarter economic data in mid July as it will take two months to see the impact of the latest interest rate hike which was on May 19. China's currency, the yuan, appreciated sharply on Wednesday after the nation's trade surplus in May soared to 22.45 billion dollars, up 73 percent from the same period of last year. The central parity rate of the yuan, also known as Renminbi (RMB) stood at 7.6282 against the U.S. dollar, 193 basis points higher from Tuesday. The sharp appreciation of RMB boosted the performance of banks and property shares as it expanded their yuan-denominated assets. Industrial and Commercial Bank of China gained 4.35 percent to 5.28 yuan, and the Bank of China added 3.85 percent to 5.40 yuan. China Vanke, the nation's largest listed real estate firm, jumped by 5.45 percent to 19.55 yuan. The Shenzhen Component Index, the nation's smaller bourse, was up 1.71 percent, or 231.76 points to finish at 13,811.48 on turnover of 122.1 billion yuan (16.0 billion dollars). The Hushen 300 Index which reflects fluctuations in China's two stock exchanges closed at 4,118.27 points, up 82.16 points or 2.04percent higher from the previous close. China Life, the nation's biggest life insurer, was up 2.17 percent to 37.62 yuan. China Petroleum and Chemical Corporation, known as Sinopec, climbed 0.60 percent to 15.20 yuan. Shares of power, steel and property were also among the day's biggest gainers. Chongqing Three Gorges Water Conservation and Electric Power surged by the daily limit of ten percent to 10.77 yuan. Baoshan Iron and Steel, the country's largest steel producer, rose 1.02 percent to 11.90. |
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