Chinese equities on the rise on Greece's bailout
Updated: 2011-07-23 09:57
By Irene Shen (China Daily)
SHANGHAI - Stocks on the Chinese mainland advanced, paring a weekly loss by the benchmark index, as a new aid plan for Greece eased concern Europe's debt crisis will spread.
China Shenhua Energy Co rose the most in two weeks, pacing gains in coal producers, after sales climbed last month, while Yanzhou Coal Mining Co added 0.6 percent. Gansu Jiu Steel Group Hongxing Iron & Steel Co jumped 4.1 percent after saying profit more than doubled.
"The increasing aid to Greece will help boost investors' confidence in the global economy and may lead to a short-term rebound in the stock market," said Mei Luwu, a fund manager at Lion Fund Management Co, which oversees more than $7.8 billion. "For the mid-term, the domestic market still lacks upside momentum, given the government's widening control on property prices and proof the economy is slowing."
The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, added 4.9 points, to 2770.79 as of its close, snapping a four-day losing streak. The index lost 1.8 percent this week, the first decline in five weeks. The CSI 300 Index gained 0.3 percent to 3067.99.
The Shanghai gauge has lost 1.3 percent this year on concern the government's efforts to curb inflation will hurt economic growth. The central bank has raised interest rates five times and the reserve-requirement ratio 12 times since the start of 2010 to stem inflation. Consumer prices rose 6.4 percent in June, the fastest pace in three years, as food costs increased.
Euro-area leaders announced 159 billion euros ($229 billion) in new aid for Greece late on Thursday and cajoled bondholders into footing part of the bill.
They also empowered their 440-billion euro rescue fund to buy debt across stressed euro nations after a market rout last week sparked concern the crisis was spreading. The fund can also aid troubled banks and offer credit lines to repel speculators.
China's mutual funds posted a combined loss of 93 billion yuan ($14.4 billion) in the second quarter as stocks and bonds fell, according to Howbuy, a Shanghai-based fund tracker. Funds increased their holdings in food, property and biomedicine stocks in the period, Howbuy said in an e-mailed statement.
A gauge tracking China's energy producers advanced 0.6 percent. China Shenhua climbed 2 percent to 29.98 yuan, the biggest gain since July 8.
The company said its commercial coal production in June rose 40 percent from a year earlier to 24.8 million tons. Sales jumped 25 percent to 32.8 million tons in June, it said. Yanzhou Coal rose to 34.06 yuan.
Gansu Jiu Steel rose to 5.90 yuan, the steepest gain since May 9, after the company said net income for the six months ended June 30 more than doubled from a year earlier to 902 million yuan.
China International Capital Corp raised its 2011 earnings-per-share forecast for Gansu Jiu by 12 percent to 0.42 yuan, citing growth potential for iron-ore output, analyst Luo Wei wrote in a report on Friday.
Indexes tracking health-care stocks advanced 1 percent and consumer staples rose 0.8 percent.