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Stocks rise 0.8% to 7-month closing high

(China Daily)
Updated: 2009-04-08 08:01

Mainland stocks rose 0.8 percent to a seven-month closing high yesterday but turnover shrank as investors grew cautious with the main index near important technical resistance.

Coal and non-ferrous metal shares outperformed on hopes for an economic recovery, and medical shares surged after news of a health care reform plan that aims to expand access to affordable coverage.

The Shanghai Composite Index ended at 2439.182 points, near the intra-day high of 2449.537.

Turnover in Shanghai A shares shrank to three-week low of 116.4 billion yuan, still active but down from Friday's 156.9 billion. The market was closed on Monday for a public holiday.

Related readings:  Chinese shares up on healthcare reform plan  Hong Kong stocks close 0.46% lower  Chinese shares edged down 0.23% led by metals  Chinese shares up nearly 1% on G20 deal

The 250-day moving average currently lies at 2481 points; the index has not stood above this widely watched average since February 2008, and a decisive break above it would be seen as a longer-term bullish signal by some investors.

"Shrinking turnover suggests people are increasingly wary, and without heavy turnover it will be hard for the index to break above strong resistance," said Huatai Securities analyst Chen Jinren.

But he and Western Securities analyst Cao Xuefeng agreed that the market remained strong, given hopes for economy recovery and ample available liquidity.

Coal industry leader China Shenhua Energy gained 5.34 percent to 23.08 yuan while Shanghai Energy jumped its 10 percent daily limit to 15.73 yuan.

Jiangxi Copper climbed 5.91 percent to 24.21 yuan, as Shanghai copper futures rose by their 5 percent limit yesterday to a five-month high amid talk of tightening local supplies.

HSI slightly lower

Hong Kong shares closed down 0.5 percent yesterday, retreating after piling on nearly 11 percent in a three-day rally, while turnover shrank as investors turned wary after falls in US financial stocks.

But losses were limited by advances in Chinese bank stocks as the Shanghai Composite Index rose and on reports of strong loan growth on the mainland in March.

Hong Kong's benchmark Hang Seng Index ended 69.07 points lower at 14928.97 after hitting a three-month high the previous session. The index is up 3.8 percent so far this year.

Turnover dropped to HK$50.9 billion from Monday's HK$62.2 billion.