Equities end losing streak
SHANGHAI - Stocks on the Chinese mainland rose on Wednesday, snapping three days of losses by the benchmark index that drove valuations to a record low, as investors speculated declines were excessive.
"Stock valuations are already very low," said Wei Wei, an analyst at West China Securities Co in Shanghai. "Though concerns about slowing earnings and economic growth are still there, most of the pessimism should already be priced in now."
The Shanghai Composite Index added 13.52 points, or 0.6 percent, to 2484.83, erasing earlier losses of 0.6 percent and halting a three-day, 1.8 percent decline. The CSI 300 Index gained 0.5 percent to 2733.11.
The Shanghai gauge has slumped 12 percent this year, extending last year's 14 percent plunge, as the government took steps to cool inflation that has been at an almost three-year high. The stock gauge is valued at 11.5 times estimated profit, the lowest on record, according to weekly data compiled by Bloomberg dating back to January 2006.
Inflation will moderate in the coming months and the country won't see high inflation next year as it did in the first half of the year, central bank adviser Li Daokui said at a forum on Wednesday.
Premier Wen Jiabao, facing calls to widen support for indebted European countries, hinted that developed economies should cut deficits and create jobs rather than rely on China to bail out the world economy.
Greek Prime Minister George Papandreou will hold a conference call with German Chancellor Angela Merkel and French President Nicolas Sarkozy amid increasing speculation that Greece will default.
China Unicom Ltd, which controls the nation's second-largest mobile phone operator, rose 3.2 percent to 5.10 yuan (80 US cents), its highest close since Aug 2.
China Coal Energy Co, the nation's second-largest coal producer, rose 1.9 percent to 9.64 yuan after output of the fuel rose 17 percent last month.
Other coal producers advanced. China Shenhua Energy Co, the nation's largest, added 0.6 percent to 25.64 yuan. Datong Coal Industry Co Ltd, the third-largest, gained 1 percent to 16.02 yuan.
Anhui Conch Cement Co, China's biggest cement producer, slid 2.8 percent to 17.77 yuan. Gansu Qilianshan Cement Group Co lost 1 percent to 12.69 yuan. Huaxin Cement Co, the Chinese affiliate of Holcim Ltd, retreated 2.9 percent to 18.23 yuan.
Home transaction volumes in Beijing, Shanghai and Shenzhen have continued to fall this month, the Shanghai Securities News reported on Wednesday. Property stocks dropped on the news.
Property sales in 19 out of the 35 Chinese cities surveyed fell last week, according to Soufun Holdings Ltd, the country's biggest real estate website owner.
Bloomberg News
(China Daily 09/15/2011 page16)
