Stocks up amid fluctuations in morning session
By Li Zengxin (chinadaily.com.cn)Updated: 2007-06-21 11:46 Chinese stocks fluctuated violently this morning but finished higher by the mid-day break. The Shanghai Composite Index ended at 4,240.88, up 59.56 points or 1.42 percent over yesterday's closing.
Opening lower from 4,170.89, the benchmark index, rose sharply to the first peak soon after it started, but then dived to the lowest 4,147.05. Then it hiked in waves to the second but higher peak at 4,256.54 and later turned down a little to the close.
The Shenzhen Component Index, tracking the smaller Shenzhen Stock Exchange, closed at 14,222.59, up 0.82 percent.
Of the A shares listed on the two exchanges, 505 went up while 812 closed down and 135 unchanged.
Shares in the finance, pharmaceutical and information technology industries led the growth in the morning. All bank shares, led by Shenzhen Development Bank, were up; China Life and Ping An were up more than 6 percent; Hongyuan Securities also gained.
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The news has prompted up the Hong Kong stock market. Hong Kong's Hang Seng Index (HSI) hit another record high yesterday. It rose 101 points, or 0.47 percent, to close at an all-time high of 21,684.
Mainland company indicator China Enterprises Index climbed to 12,138 in the morning session, before closing at 11,905, gaining 38.7 points, or 0.33 percent. PetroChina and China Mobile went up 5.2 percent and 0.06 percent, settling at HK$11.74 and HK$80.4.
Analysts said the market was stimulated by impending A-share floats and reports that the Hong Kong government is studying ways to narrow the discrepancy between A- and H-share prices.
The central bank's Shanghai headquarters yesterday issued a report warning investors to prevent market risks caused by changing expectations. The report on Shanghai's financial stability for 2007 points out that excessive liquidity is a concrete manifestation of China's economic imbalance, and that the price of equities showed a marked increase in 2006.
Concerns about an overheated economy grew sharply among Chinese entrepreneurs and bankers in the second quarter, according to the People's Bank of China surveys. More bankers expected further tightening measures including interest rate hikes in the second half of the year.
Fourteen percent of 5,635 entrepreneurs expressed concern that the economy, which hit its highest point since the first quarter of 1994, was expanding too quickly. The entrepreneurs' confidence index fell to 83.4 percent, the lowest level in two years. The index was 87.1 percent in the same period last year and 88.5 percent in the first quarter this year.
The entrepreneurs surveyed said they think the economy will continue to
overheat in the third quarter, with the overheating expectation sub-index
hitting a record high of 8.6 percent.
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