Energy sector drives index near all-time high
Updated: 2007-07-25 17:39
Shares of major power generators electrified the Chinese A-share market and pushed the index over 4300 today. With the all-time high of the index within reach, investors began to count down to the exciting moment which will mark the end of the month-long correction and inaugurate a new stage of market growth.
A cautious mood still permeated the market early in the morning following yesterday's plunge in the last hour of trading. The benchmark Shanghai Composite Index opened at 4212.95, and continued Tuesday's consolidation with an overall upward trend. Led by outstanding performances in the energy sector, the index began its climb in the afternoon to above 4300 points and challenged its historical high. It finally closed at 4323.97 with a 2.7 percent increase, almost the day's highest and just 13 points below the 4336-point record. However, the transaction value of the market went down today, to 125.7 billion yuan (US$16.6 billion), smaller than yesterday's amount.
Shanghai Composite Index
source:www.sina.com.cn
Shenzhen Component Index
source: www.sina.com.cn
The Shenzhen Component Index, tracking the smaller Shenzhen Stock Exchange, edged 1.49 percent higher from yesterday and closed at 14403.08, with a turnover of 66.53 billion yuan.
Of all A-shares in the two markets, 1,275 stocks celebrated their profit today. Only 66 went down and 117 closed flat.
Shares of power generating and coal mining companies were boosted today by reports that the nation's five power generation groups had asked regulators to raise electricity prices, leaving more room for a coal price hike. Share prices of Yanzhou Coal mining and Huadian Power International clinched their maximum gains in the afternoon. Most energy related shares achieved notable gains today.
However, the real energy behind the bull market is affluent capital. Data released yesterday by China Insurance Regulatory Commission showed that in the first half of this year, more than 300 billion yuan of insurance funds flew into domestic stock and equity market, accounting for 11.76 percent of the total insurance asset. Blue chips like Baoshan Iron and Steel and China Merchants Bank remained insurers' top choices.
The recent eruption of the market also drew more new investors into the bourse. Statistics from the China Securities Depository and Clearing Corp show around 107,300 new stock trading accounts were opened on Monday, 40,000 more than the previous trading day. The number is sure to climb further following the index's broken record, which may occur within the next day or two.
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