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Stocks end up, finance and property in focus

(Agencies)
Updated: 2008-11-12 17:16

China's stock market rose on Wednesday, led by financial, property and construction related shares in modest turnover, lifted by the positive impact of this week's announcement of a major economic stimulus package.

The Shanghai Composite Index ended up 0.84 percent at 1,859.11 points, after falling 1.66 percent on Tuesday.

Gaining Shanghai stocks outnumbered losers by 822 to 98, with more than 25 Shanghai A shares jumping by their 10 percent daily limit. The turnover in Shanghai A shares shrank to 40.9 billion yuan ($6 billion) from Tuesday's 56.5 billion yuan.

"The stimulus package only boosted certain sectors," said Li Shiming, analyst at Xiangcai Securities. "With worries over an economic slowdown, that could mean the index will have limited room to move up or down."

Others agreed that the market's attentions would shift from the measures to economic growth prospects.

"The positive effect of the package is fading, so the index may consolidate for some days as sentiment has turned dull again. Investors are back to facing grim reality," said Chen Jinren, analyst at Huatai Securities, referring to China's economic slowdown.

A pullback in retail sales in October on Wednesday provided stark evidence of weakening consumption.

China's annual retail sales growth slowed only moderately to 22.0 percent in October from 23.2 percent in September, but this masked sharp slowdowns in sales growth for products such as home appliances and recreational goods. Companies which could benefit directly from the stimulus package's fiscal spending on infrastructure projects were strong for three sessions.

But analysts said rallies in certain sectors such as infrastructure stocks may not be sustainable as some have already risen sharply. Cement makers such as Taihang Cement surged 10 percent for six straight sessions.

Baoshan Iron & Steel, the biggest listed steel maker, edged up 0.77 percent to 5.22 yuan after climbing 13 percent over the previous two days.

Financial shares were strong, with Industrial & Commercial Bank of China, the biggest bank, edging up 0.51 percent to 3.94 yuan.

Haitong Securities, however, rose 2.97 percent to 13.17 yuan after tumbling 7.25 percent on Tuesday on concerns that a large amount of its shares will soon become tradable.

A total of 725 million of its shares placed to eight institutional investors last year at 35.88 yuan apiece will become tradable as lock-up periods expire on November 21 and December 21.

Vanke, China's biggest listed property developer, climbed 2.07 percent to 6.40 yuan after gaining 2.28 percent on Tuesday.