China's shares rose yesterday as investors favoured drug stocks, betting the deadly flu-like SARS outbreak will benefit them, brokers said.
But they said financial counters did not fare as well, falling after a bout of profit-taking.
Shanghai's composite index rose by 7.364 points, or 0.46 per cent, to 1,613.604 while Shenzhen's sub-index edged 7.45 points, or 0.22 per cent, to 3,453.32.
Shanghai's hard currency B-share index nudged up 0.51 per cent to 129.001 points while Shenzhen's rose 1.08 per cent to 229.46. B shares are open to Chinese and foreign investors.
Punters bought heavily into drug firms in the afternoon, partly due to the rising number of SARS cases in China, as they believed drug firms would benefit from the illness, analysts said.
Livzon Pharmaceutical Group Inc, based in the southern province of Guangdong where most of China's SARS cases have been reported, was among the top gainers in Shenzhen with a 3.96 per cent rise to HK$5.25 (US$0.695).
Henghe Pharmaceutical was Shenzhen's top A-share performer, rising its 10 per cent daily limit to 8 yuan (US$0.963).
Analysts said wary punters cashed out of financial counters after recent rises spurred by the fast-growing economy.
"Although some investors unloaded financial shares to take profit, the overall market sentiment was still strong," said analyst Yu Xiaoli of Haitong Securities.
"We expect the overall market to continue its uptrend in the near term."
Yuan-denominated A shares in China Merchants Bank dropped 1.3 per cent to 12.47 yuan (US$1.5) with 97.3 million shares changing hands. The second most actively traded stock in Shanghai yesterday has gained 15.5 per cent since April 7.
Minsheng Bank, China's sole private bank, was the third biggest decliner in Shenzhen with a 4.5 per cent fall to 11.46 yuan (US$1.38). It has risen more than 20 per cent over the past week.
It reported a 43 per cent rise in net profit for the first quarter, thanks to rapid expansion in its core business.
On the foreign exchange market, China's yuan closed one notch firmer against the dollar at 8.2771 yesterday, buoyed by strong first quarter economic data, dealers said.
The yuan was sandwiched between 8.2770 to 8.2772, near the strong end of a wafer-thin trading range of 8.2760 to 8.2800 that the central bank enforces for reasons of economic stability.
Turnover fell to US$440 million from Wednesday's US$450 million.
"The yuan kept firm within its range as first quarter data was very strong," said a dealer at a European bank.
China said yesterday its economy grew 9.9 per cent year-on-year in the first quarter, the fastest in six years.
Exports soared nearly 34 per cent to more than US$86 billion, although high oil prices and heavier imports of raw material, machinery and cars led to a slight trade deficit of about US$1 billion.
But dealers said there was a glut of hard currency on the Shanghai-based foreign exchange market, the result of strong trade surpluses over the past few years.
This was likely to keep the yuan, which is not freely convertible on the capital account, at high levels, they added.
The yuan weakened yesterday against the Japanese currency to 6.9425 per 100 yen from 6.8802 on Wednesday and eased to 9.0572 to the euro from 8.9373. It ended unchanged at 1.0609 against the Hong Kong dollar.
On the futures market, Shanghai copper futures clawed higher after narrow trade yesterday as investors waited for clearer leads to emerge from the London Metal Exchange, traders said.
The most active September 2003 contract ended 30 yuan (US$3.6) higher at 16,830 yuan (US$2,033) a ton, with other contracts unchanged at 50 yuan (US$6) higher.
(China Daily April 19, 2003)