Markets

Commodity firms lead rise in stocks - May 27

By Zhang Shidong (China Daily/Agencies)
Updated: 2010-05-28 09:22

SHANGHAI: China's stocks rose for a second day, led by commodity producers, on speculation Europe's debt crisis will stop the government from further tightening monetary policy.

Jiangxi Copper Co and Aluminum Corp of China Ltd, the nation's biggest makers of copper and aluminum, advanced at least 3 percent as metal prices increased.

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China Life Insurance Co added 2 percent and Ping An Insurance (Group) Co gained 1.5 percent after the insurance regulator said insurers' caps on equity investments may be raised. A measure tracking property stocks erased earlier losses, adding 0.99 percent.

The Shanghai Composite Index climbed 30.13, or 1.15 percent, to 2655.92 at the close. The CSI 300 Index added 1.64 percent to 2859.98.

Concern that the government will step up measures to curb property speculation and government debt in Europe will prevent nations from bolstering their economies has dragged the Shanghai Composite down 19 percent this year. The slump decreased the average price of the stocks on the gauge to 19.8 times earnings, near the lowest level since February 2009.

Europe's slowdown will delay the need for the United States to raise interest rates, reducing risks of a "double-dip" recession, Jerry Lou, Morgan Stanley's China strategist, said.

He shares the view of investors Martin Currie Ltd's Chris Ruffle and Templeton Asset Management Ltd's Mark Mobius, who are buying more of the nation's stocks after they entered a bear market this month. Mobius on Wednesday called the slump in emerging-market shares a "correction" in a bull market.

Jiangxi Copper rose 3.6 percent to 30.20 yuan ($4.42). Aluminum Corp of China Ltd gained 3.1 percent to 10.55 yuan. Zhuzhou Smelter Group Co climbed 5.7 percent to 11.16 yuan.

China Vanke Co gained 1.2 percent to 7.53 yuan after falling as much as 2.6 percent. Poly Real Estate Group Co rose 0.3 percent to 11.73 yuan.

China Life rose 2 percent to 24.63 yuan. Ping An added 1.5 percent to 46.10 yuan.

Hang Seng up

Hong Kong stocks rose for a second day after Morgan Stanley recommended buying Chinese shares, with miners gaining on optimism Australia will change a proposed resources tax, and shippers climbed along with transport fees.

Citic Pacific Ltd, which is building an iron-ore mine in Western Australia, surged 6.5 percent to HK$13.82. Yanzhou Coal Mining Co, which paid more than $3 billion for Felix Resources, rallied 7.2 percent to HK$16.78 after a newspaper said Australia may change a proposed resources tax.

The Hang Seng Index gained 1.22 percent to close at 19431.37, after dropping as much as 1.2 percent. The Hang Seng China Enterprises Index rose 1.8 percent to 11208.76.