Chinese shares close 1.15 percent up

SHANGHAI, Dec 21, 2007 (AFP) - Chinese share prices closed 1.15 percent higher Friday, led by airlines and metal companies, with investors shrugging off the latest interest rate hike, dealers said.

They said that investors had already factored in the rate hike and continued to build their positions amid bargain-hunting.

The benchmark Shanghai Composite Index, which covers both A and B shares, closed up 58.24 points to 5,101.78 on turnover of 103.48 billion yuan (13.80 billion dollars).

China's central bank announced late Thursday its sixth interest rate hike this year, the government's latest move to slow rising inflation and cool an economy that is growing at double-digit pace.

The hike, which took effect on Friday, raised deposit rates 27 basis points and the lending rate by 18 basis points.

"The interest rate hike didn't impact the market because it was within expectations while some investors may also regard it as the end of negative news for this year," said Mo Fan, an analyst with Soochow Securities.

Some analysts also believed that the central bank would have limited room for further raising interest rates.

The Shanghai A-share Index rose 61.36 points or 1.16 percent to 5,353.76 on turnover of 102.97 billion yuan and the Shenzhen A-share Index was up 19.59 points or 1.37 percent at 1,445.73 on turnover of 49.29 billion yuan.

The yuan ended the day at 7.3671 against the US dollar, down from Thursday's finish of 7.3667.

Banks were mixed with Industrial and Commercial Bank of China adding 0.12 yuan to 8.01, while Industrial Bank shed 0.51 yuan to 49.09.

Some property developers recovered in late trade as the lending rate for loans over five years and government-assisted mortgage rates remained unchanged.

COFCO Property gained 0.90 yuan to 23.40, and China Vanke fell 0.08 to 28.30. Jiangxi Copper gained 1.49 to 50.32, and Aluminum Corp of China added 1.27 to 38.98.

China Eastern Airlines Corp advanced 0.40 to 18.73, and China Southern Airlines rose 1.21 to 26.56.

Liaoning Publishing and Media surged 15.29 to 19.93 from its initial public offering price of 4.64 on its Shanghai debut Friday.

The Shanghai B-share Index rose 0.91 points or 0.26 percent to 355.49 on turnover of 511.53 million US dollars and the Shenzhen B-share Index rose 5.91 points or 0.87 percent at 685.10 on turnover of 381.01 million Hong Kong dollars (48.85 million US dollars).