Large-cap stocks lead to market recovery
Updated: 2007-11-24 10:26
 A man cleans the floor at a securities exchange in Nanjing, East China's Jiangsu Province, on Friday. Despite the continuous fall of the share prices of PetroChina, the largest listed company on the mainland by capitalization, the stock market recovered slightly on Friday. [Agencies/China Daily] |
Despite the continuous fall of the share prices of PetroChina, the largest listed company on the mainland by capitalization, the stock market recovered slightly on Friday.
The Shanghai Composite Index rose 0.96 percent, or 47.97 points, to close at 5023.13. Gainers outnumbered losers by 699 to 130.
The Shenzhen Component Index jumped 1.68 percent, or 268.15 points, to close at 16217.51.
Turnover on the two bourses shrank substantially to 75.5 billion yuan, breaking the previous record low of 81.2 billion yuan on February 5.
Analysts said that Friday's rise was a technical rebound led by large-cap stocks, which had dropped substantially in recent weeks. But PetroChina, which plunged 21 percent after it began trading on November 5, slid 1.48 percent to close at 34.59 yuan, while its H share rose 1.13 percent to close at HK$14.28.
"The price of PetroChina has dropped to less than 35 yuan per share, which is the reasonable price level acknowledged by many analysts," said Wu Feng, an analyst at TX Investment Consulting Co Ltd.
The sharp rebound of the Hong Kong stock market, where many mainland enterprises are listed, also had a positive impact on the mainland market, analysts said.
The Hang Seng Index climbed 2.06 percent to close at 26541.09 on Friday.
Large-cap stocks led the rally on the mainland then. China Aluminum jumped 4.23 percent to close at 36.99 yuan. The Industrial and Commercial Bank of China rose 1.8 percent to close at 7.9 yuan, and its H share surged 3.742 percent to close at HK$5.96. Sinopec increased 1 percent to close at HK$22.32, and its H share soared 2.789 percent to close at HK$10.32.
"The shrinking new A-share accounts' opening and turnover showed that the market is beginning to cool down, and the index is expected to fluctuate at around 5000 points in the short term," said Tang Xiaosheng, chief analyst at Essence Securities.
Analysts said investors should turn to companies with good earnings expectations as the market settles.
According to Morgan Stanley, telecom, banking and energy industries have the best earnings qualities and high core earning ratios, while utility, healthcare and consumer discretionary sectors have the lowest.
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