 Falling oil price boosts mainland stocks
(China Daily)
Updated: 2008-07-25 07:47  Mainland stocks surged yesterday, led by oil refiners and interest rate-sensitive shares such as banks and property firms, after global oil prices fell further, partly easing concern about inflation and a further tightening of Chinese monetary policy. The Shanghai Composite Index added to its gains in the afternoon and closed 2.55 percent higher at 2910.29 points, just off its intra-day high of 2912.7. Turnover in Shanghai A shares expanded to a two-week high of 77.8 billion yuan from Wednesday's 64.1 billion. Sinopec Corp, Asia's biggest refiner, rose 2.97 percent to 11.43 yuan, as lower crude oil prices could help its refining margins. Merchants Bank climbed 5.57 percent to 25.44 yuan, while major real estate developer Vanke jumped 6.66 percent to 9.29 yuan. "With the global economy slowing down, inflationary pressure will definitely ease," said Lu Yi, executive director at Shanghai Qi De Investment Consultancy, a private fund manager. However, Lu said he remained cautious about the stock market's outlook after the Olympics, as the economy faced the risk of a sharp slowdown due to slowing exports, a weak property market and a gloomy world economy. Gold producers were among the biggest losers yesterday after international gold prices slid along with oil. Shandong Gold slipped 1.26 percent to 58.75 yuan, after dropping 5.06 percent on Wednesday. Technically, the index is short-term bullish after it triggered this week a symmetrical triangle formed by this month's highs and lows, which suggested July's 17-month low of 2,566 points may have been a longer-term bottom. HK shares off highs Hong Kong shares closed 0.2 percent lower after a skittish Thursday session as resources shares dragged the main index back after its firmest start in six weeks, undercutting an extended rally in financial stocks. Bourse operator Hong Kong Exchanges&Clearing rose nearly 3.6 percent to a five-week high at HK$124.5. The recent rally in the stock market has spurred short covering in shares of Asia's top exchange operator. But CNOOC fell close to 2.2 percent, while coal miner China Shenhua dropped 4.9 percent as crude oil prices held below $125 per barrel after US data showed a big increase in crude inventories, indicating high prices were starting to affect demand. Agencies  (China Daily 07/25/2008 page15) |
