SHANGHAI (XFN-ASIA) – China A-shares ended the morning stronger after the main index hit another intraday high, helped by gains in steel and metal companies seen as having attractive valuations, dealers said.
The benchmark Shanghai Composite Index, which covers both A- and B-shares listed on the Shanghai Stock Exchange, ended the session up 67.08 points or 1.47 pct at 4,627.85. It hit a fresh intraday high of 4,629.10, surpassing the previous high of 4,562.69 reached on Friday.
‘The market continued its advance from Thursday after a slump prompted by worries about the US mortgage sector,’ said Wu Feng, an analyst at TX Investment Consulting Co. ‘The rise in the morning was led by steel and metal companies with relatively low valuations.’
But Wu cautioned that share prices could be volatile this week as profit-taking pressure will cap some overvalued sectors such as property stocks.
Analysts said the index will likely finish at a new record today. It closed at a record high on Friday, the third time in a week, and has gained more than 60 pct this year on ample liquidity and upbeat interim earnings.
Guangzhou Iron and Steel Co Ltd (SHA 600894) surged 0.72 yuan or by a 10 pct daily limit to 7.89. The official Xinhua news agency reported that the listed company’s parent Guangzhou Iron and Steel Enterprises signed an agreement with Group Japanese steel giant JFE Holdings Inc to jointly invest 6.34 bln yuan in building a steel sheet plant in the southern city of Guangzhou.
Maanshan Iron & Steel Co Ltd (SHA 600808; HK 0323) gained 0.77 yuan to 9.01, while Wuhan Iron & Steel Co Ltd (SHA 600005) added 0.86 yuan to 14.26.
Analysts added that an industry consolidation is expected to provide catalysts for share prices going forward.
Non-ferrous metal companies also were stronger as analysts expected international metal prices to remain firm.
Jiangxi Copper Co Ltd (SHA 600362; HK 0358), China’s largest integrated copper producer, rose 2.62 yuan to 34.65.
It soared seven pct on Friday after it said it received regulatory approval to issue 290 mln additional A-shares in a private placement.
Xiamen Tungsten Co Ltd (SHA 600549) climbed 2.16 yuan to 24.03 after it rose its 10 pct daily limit in the previous session.
Bank of Ningbo Co Ltd (SZA 002142), in which Singapore’s Oversea-Chinese Banking Corp holds a 10 pct stake, shed 0.47 yuan to 30.98, despite its report of first half net profits rising 40.93 pct year-on-year. Analysts said the profit had been anticipated and its share price had already reflected this factor.
The Shanghai A-share Index rose 70.82 points to 4,855.21, and the Shenzhen A-share Index was up 22.61 points at 1,406.86.
The FTSE/Xinhua China A 50 Index was up 397.97 points at 18,072.06. The FTSE/Xinhua China A 200 Index was up 285.20 points to 13,614.86 and the FTSE/Xinhua China A 600 Index up 228.97 points at 11,628.83.
(1 usd = 7.57 yuan)
Copyright AFX News Limited 2007. All rights reserved.
The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.