Money
Mainland stocks recover lost ground
By Irene Shen (China Daily)
Updated: 2010-12-11 09:22
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SHANGHAI - Stocks on the Chinese mainland rose, erasing a weekly loss for the benchmark index, as commodity producers gained after the nation's exports rose and insurers climbed on speculation higher borrowing costs would boost investment yields.
PetroChina Co was the biggest contributor to gains on the benchmark index, and Jiangxi Copper Co climbed 1.56 percent after outbound and inbound shipments rose to a record and materials prices increased.
China Life Insurance Co paced an advance by insurers ahead of the weekend release of a report expected to show that inflation accelerated last month, boosting the case for higher interest rates.
"Some investors are betting the situation would become clearer after this weekend, but that won't change the overall downward pressure in the market," said Deng Changrong, a strategist at Huaxi Securities Co in Shenzhen.
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The Shanghai gauge has lost 10 percent since reaching a high on Nov 8, extending this year's loss to 13 percent, on concern tighter monetary policy will slow growth in the world's fastest-growing major economy.
Indexes tracking energy and materials producers gained at least 1.6 percent on Dec 10, two of the three biggest advances on the CSI 300. PetroChina rose 0.62 percent to 11.45 yuan ($1.72). China Shenhua Energy Co added 0.97 percent to 24.03 yuan.
China Life rose 1.88 percent to 23.34 yuan, and Ping An Insurance Group Co rallied 2.92 percent to 60.90 yuan, the highest in a month.
Chinese life insurers are more positively correlated with bond yields than with stock market performance, because they earn better returns by investing in higher-yield bonds with new premium incomes, BNP Paribas said on Dec 9.
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