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Chinese shares driven higher by rally in metal shares
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Chinese equities edged up on Thursday after three days of losses, but volume shrank as investor confidence remained weak, analysts said.

The Shanghai Composite Index edged up 0.03 percent, or 0.74 points, to 2,277.41. In Shenzhen, the market added 0.81 percent, or 60.05 points, to close at 7,473.6.

Aggregate turnover fell to 38.99 billion yuan (5.7 billion USdollars) from 49.1 billion yuan on the previous trading day. It was only slightly higher than a 21-month low of 38.9 billion yuan on Tuesday.

Gains outnumbered losses by 608-236 in Shanghai and 502-197 in Shenzhen.

Analysts said there was increasingly a wait-and-see attitude among investors as their confidence was badly hurt by the heavy, prolonged slump.

The rally in metal shares, which were previously oversold, provided a boost to the index and it was a result of a market correction, a Huatai Securities analyst said. The rally was also boosted by an overnight rebound in metal future prices.

Zhongjin Gold Corp. shares rose 2.03 percent to 27.69 yuan and Aluminum Corporation of China gained 1.14 percent to 9.72 yuan.

Agriculture shares gained after the Ministry of Agriculture announced a guideline on Thursday to increase the output of 16 crops. These included soybean, rice, corn and potato, among others,during the 2008-2015 period.

Longping Hi-tech shares added 1.71 percent to 18.39 yuan. Sichuan Hejia Co. rose 1.02 percent to 6.95 yuan, while Shandong Denghai Seed Industry Co. surged 9.42 percent to 19.05 yuan.

Airline shares gained as concerns eased that higher fuel costs would erode earnings.

Crude oil for October delivery edged down 0.3 percent overnight to 109.35 US dollars per barrel on the New York Mercantile Exchange. It has dropped 26 percent from its peak of 147.27 US dollars in mid-July.

Air China shares were up 0.71 percent to 5.66 yuan and Shanghai Airlines edged up 0.23 percent to 4.37 yuan. Hainan Airlines added 0.79 percent to close at 3.85 yuan.

(Xinhua News Agency September 5, 2008)

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