Broad rally buoys Shanghai index

2007-12-26 21:44:09 Shanghai Daily

A RALLY across the board pushed the Shanghai index higher in the early session today with technology stocks leading the way and industrial shares driven by profit reports.

The Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B shares, added one percent, or 52.53 points, to 5,285.88 at 11:30am today.

Winners in the Shanghai market outnumbered losers 537 to 213 and 96 were unchanged.

The Shenzhen Composite Index, which covers the smaller mainland stock market, gained 1.34 percent, or 19.26 points, to 1,452.32.

China United, which controls the nation's second-largest cell-phone operator, jumped 8.11 percent, or 0.92 yuan (13 US cents), to 12.27 yuan.

China's government has supported the development of TD-SCDMA mobile phone technology to compete with W-CDMA and CDMA2000. It is poised to award licenses for networks to offer so-called 3G phone services during the 2008 Olympic Games in Beijing.

The technology represents "a major thrust in the future of China's information technology,'' China's State Council said in a statement yesterday, without giving details.

"The implementation of the technology raises the competitiveness and innovation of China's wireless communication industry.''

Meanwhile, industrial stocks also contributed to the rally this morning after the National Statistics Bureau said Chinese industrial companies' profits rose 36.7 percent in the first 11 months, outpacing the gain a year earlier.

Datang Power, China's second-biggest electricity producer by market value, surged 6.01 percent, or 1.13 yuan, to 19.92 yuan, extending a seven-day rise. The company jumped 8.55 percent yesterday.

Aluminum Corp of China Ltd, known as Chalco and the nation's biggest maker of the lightweight metal, advanced 2.40 percent, or 0.96 yuan, to 40.94 yuan. Parent Aluminum Corp of China will probably post a record profit of more than 20 billion yuan this year, China Nonferrous Metals News reported, citing company data.

The statistics bureau said today that combined industrial net income climbed to 2.3 trillion yuan. That's more than the almost 31 percent increase through November 2006. Sales jumped 27.6 percent to 35.5 trillion yuan.

China, the world's fourth-biggest economy, is trying to cool spending on factories to curb environmental damage and also the risk of industrial overcapacity and bad loans should demand for exports slow.

The government this month raised borrowing costs to a nine-year high and ordered the biggest increase in four years in the proportion of deposits that banks must set aside as reserves.

Meanwhile, Airlines recovered from yesterday's loss and climbed this morning after the yuan rose the most since China ended a fixed exchange rate to the US dollar in 2005 as the central bank sought to curb inflation.

Air China, the world's biggest airline by market value, edged up 0.79 percent, or 0.21 yuan, to 26.73 yuan. China Southern inched up 0.67 percent, or 0.18 yuan, to 26.87 yuan.

The yuan climbed 0.38 percent to 7.3162 to the US dollar at 9:55am in Shanghai, according to the China Foreign Exchange Trade System. It rose as much as 0.43 percent.