Hope for more stimuli lifts China shares
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E-mail Xinhua, May 29, 2012
China's equity markets rallied for a second straight day on Tuesday, as investors expect that policymakers will soon adopt more stimulus measures to stabilize growth in the world's second-largest economy.
The benchmark Shanghai Composite Index dipped slightly at opening but soon picked up momentum on speculation that the government will boost spending and launch more projects to maintain growth.
Investors scooped up shares of metals, brokerage firms, coal and glass producers, sending the Shanghai index up by 28.27 points, or 1.2 percent, to close at 2,389.64.
The Shenzhen Component Index opened almost flat and followed a similar rallying course before jumping 110.64 points, or 1.09 percent, to close at 10,214.74.
Combined turnover rose sharply to 202.21 billion yuan (31.96 billion U.S. dollars), as investors were eager to buy risky assets, compared with Monday's 158.3 billion yuan.
Gainers outnumbered losers 805 to 98 in Shanghai and 1,314 to 123 in Shenzhen.
Over the past several days, the Chinese government has announced a series of measures to expand domestic demand and give private capital greater access to industries in a bid to spur the slowing economy.
The State Council said stabilizing economic growth will be given a more prominent position. The National Development and Reform Commission, the country's top economic planner, said it will accelerate reviews and approvals for major projects in order to maintain growth.
Home appliance manufacturers rose after the Ministry of Finance said it will subsidize the sales of energy-saving flat-panel TVs and air conditioners. Hisense rose 5.89 percent to 18.88 yuan per share. Chunlan gained 4.67 percent to 5.38 yuan.
Glassmakers surged, as construction on major projects is expected to boost demand for building materials. Luoyang Glass Co., Ltd., hit the daily limit of 10 percent to close at 6.89 yuan. Guangdong Golden Glass Technologies Limited also soared by 10 percent to 7.63 yuan.
Steel companies gained ground after the NDRC approved the construction of two major projects in the cities of Fangchenggang in the Guangxi Zhuang autonomous region and Zhanjiang in Guangdong province.
The banking sector increased modestly after the central bank announced that it has approved the direct trading of the yuan against the Japanese yen starting in June.
The Industrial and Commercial Bank of China, the country's largest bank, added 0.48 percent to 4.22 yuan. China Construction Bank, the second-largest lender, went up 0.67 percent to 4.53 yuan. The Bank of China, China's biggest foreign currency trader, rose 0.33 percent to 3.03 yuan.
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