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Equities rebound on fresh stimulus moves

(China Daily/Agencies)
Updated: 2009-12-11 07:56

Mainland shares rose for the first time in three days, led by household-goods makers, after the government extended policies to boost consumption. Developers fell after the government scrapped a tax break on property sales.

Hisense Electric Co, a manufacturer of flat-panel televisions, advanced 5.8 percent to a record of 24.35 yuan, while Gree Electric Appliances Inc, China's largest maker of home air-conditioners, added 2.5 percent to 27.58 yuan.

China Vanke Co, the nation's biggest listed property developer, slid 1 percent to 11.91 yuan.

The Shanghai Composite Index added 14.7, or 0.45 percent, to close at 3254.26. The CSI 300 Index gained 0.64 percent to 3577.24.

"The stimulus plans will greatly promote the potential for China's domestic consumption, which is enormous," said Xu Lirong, a Shanghai-based fund manager at Franklin Templeton Sealand Fund Management Co, which oversees about $2.6 billion.

The State Council will extend subsidies for purchases of appliances and farming equipment in rural areas, the cabinet said on Wednesday. China will also continue appliance trade-in subsidies beyond May 2010.

An index tracking consumer discretionary stocks on the CSI 300 has climbed 130 percent this year, the best performer among the 10 industry groups.

The Shanghai Composite may reach 4500 next year as the fastest economic growth in three years bolsters domestic consumption, according to CITIC Securities Co, the biggest broker by market value.

Hang Seng falls

Hong Kong stocks fell for a fifth day as mainland developers and automakers dropped after the State Council said it will re-impose a sales tax on homes sold within five years and scale back some tax breaks for car buyers.

Guangzhou R&F Properties Co, the biggest developer in the southern city, dropped 3.5 percent. Dongfeng Motor Group Co, the biggest automaker traded in Hong Kong, plunged 6 percent to HK$10.96. Geely Automobile fell 8.2 percent to HK$4.23.

The Hang Seng Index declined 0.19 percent to close at 21700.04.