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Chinese shares slightly amid profit worries

(Xinhua)
Updated: 2009-01-19 15:27

Chinese share prices closed 1.65 percent higher on Monday amid worries of shrinking corporate profits.

The Shanghai Composite Index gained 1.65 percent to 1,986. The Shenzhen Component Index climbed 0.94 percent to 6,982.

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Combined turnover fell to 120.45 billion yuan ($17.16 billion) from 147.14 billion yuan on the previous trading day.

Tebon Securities analyst Gu Jingdong said the market would maintain that level as investor confidence was dampened by bleak corporate earnings and more 2008 economic data was scheduled to be announced this week.

Banks led Monday's rise after reports of State-backed share purchases of the country's top three lenders. Industrial and Commercial Bank of China closed 3.37 percent up at 3.68 yuan. China Construction Bank gained 4.94 percent to 4.04 yuan. Bank of China climbed 3.33 percent to 3.1 yuan.

The Central Huijin Investment Co Ltd, an investment arm of the China Investment Corporation (CIC), had been "continuously" buying shares of China's top three commercial banks, said CIC chairman Lou Jiwei on Friday. He didn't disclose how many shares had been purchased.

Anticipations of government support in large refineries sent the oil and refinery sectors up with Sinopec closing 4.98 percent higher at 7.8 yuan and PetroChina up 2.42 percent to 10.57 yuan.

Property shares also rose on expectations of another interest rate cut before the Lunar New Year. Vanke, the biggest residential real estate developer, was up 1.45 percent to 7.02 yuan.

A report from Haitong Securities said Chinese markets would keep seesawing in January, tracking fluctuations in markets elsewhere.

Other Asian stocks pushed higher on Monday as investors looked for US President-elect Barack Obama, set to take office on Tuesday, to quickly roll out hefty economic stimulus spending and a revived plan to buy bad bank assets.

Japan's Nikkei average gained 0.8 percent on the currency's broad dip that boosted shares of major exporters. Hong Kong's Hang Seng index rose 0.9 percent, despite further losses for index heavyweight bank HSBC, which fell 3.4 percent on continued fears it may have to raise more capital and cut dividends.