Shanghai index edges up at midday break

BEIJING, June 2 -- Shanghai's key stock index edged up in the morning session today. Power producers led the gains after a report said the government may offer subsidies to the industry.

The Shanghai Composite Index gained 0.57 percent, or 19.48 points, to 3,452.84 at 11:30 a.m. The index is comprised of yuan-denominated A shares and hard-currency B shares,

However, losers in the Shanghai market outnumbered gainers 402 to 389 while 16 were unchanged.

The Shenzhen Composite Index, which tracks the smaller domestic stock exchange, was down 0.20 percent, or 2.06 points, to 1,034.93.

Datang International Power surged 4.3 percent to 12.97 yuan (1.87 U.S. dollars) while Huaneng International increased 5.46 percent 11.01 yuan.

Zhai Ruoyu, the president of Datang's parent company China Datang Corp, said the government is considering giving subsidies to power producers.

Chongqing Changan Automobile Co gained 0.71 percent to 7.14 yuan. The Chinese partner of Ford Motor Co said it will make compact cars in Iran from the first half of next year.

Beijing-based Huaxia Bank dropped 4.07 percent to 11.30 yuan. It said 513.9 million shares will be released from sale restrictions on June 6, according to its statement to the Shanghai stock exchange yesterday.

Huaxia's unlocked shares were just one of several new stock supplies scheduled to hit the market.

China State Construction Engineering Corp, the country's largest real-estate contractor, plans to sell a 40 percent stake in an initial public offering.

The People's Bank of China said in a report on its Website on Friday that Bank of Shanghai Co, Chongqing City Commercial Bank, Bank of Tianjin and Hangzhou City Commercial Bank are working on first-time share sale plans.

The Shanghai index has declined 34.52 percent this year, the steepest decline among the world's 20 biggest equity markets.

Investors are cautious as companies including Ping An Insurance (Group) Co won approval to sell more shares and on concern the highest interest rates in nine years will slow profit growth.

(Source: Shanghai Daily)