Stocks News
- Stocks sharply up on bargain hunting
Date: 15-Nov-2007 Sources: (Shenzhen Daily)
STRONG gains in Hong Kong stocks fueled bargain hunting in mainland shares yesterday, helping the key index to post its largest daily percentage rise in nearly three months.
The Shanghai Composite Index ended at 5,412.694 points, following a steep decline over the past month on fears of further monetary tightening, a temporary freeze on new mutual fund products and expectations that listings of large-cap stocks would sap funds from the secondary market. It was the index's largest daily rise since it climbed 5.3 percent Aug. 20.
The Shenzhen Composite Index finished the day 3.8 percent higher at 1,319.45.
But turnover in Shanghai A shares remained modest at 87.4 billion yuan (US$11.81 billion), up slightly from Tuesday's 82.3 billion yuan, showing investors remained cautious with more monetary tightening expected as soon as this week.
'The market fell too much in the past weeks, so a rebound like today's is natural,'said Zhou Guangshan, analyst at Guotai Securities Co. 'But I don't think there's much room for stocks to rise further.'
Analysts said the rally, following four straight days of losses, was spurred by sharp rises in overseas stock markets yesterday, particularly in the Hong Kong bourse, where the benchmark Hang Seng Index gained more than 4 percent.
'Global stock strength sparked a technical rebound on the Shanghai market today,'said analyst Zhou Fengwu at Orient Securities. 'But the potential for the Shanghai index to rise sharply is limited as lingering weakness over the past month has weighed down investor sentiment.'
Analysts expect the central bank to announce another interest rate hike as early as this week to curb inflation, which could cap the market.
Central bank head Zhou Xiaochuan reaffirmed his determination to stabilize inflationary expectations and curb excess liquidity in remarks published yesterday, after data showed that inflation in October rebounded to 6.5 percent, an 11-year high.
'We must avoid the situation of having negative real interest rates for long,'Zhou said in an interview with the Financial News, a newspaper published by the central bank.
'Many more (investors) remained on the sidelines in anticipation of a possible rate hike announcement this weekend,'said Zhang Gang, an analyst at Central China Securities.
Some analysts said yesterday's rally was also fueled by hopes that regulators would soon approve the launch of new funds, in order to help keep the stock market stable and ensure a successful listing of large State-owned enterprises.
The China Business News, quoting unidentified sources, reported yesterday that several domestic mutual fund houses were likely to win official approval to convert some of their closed-end funds into open-ended products.
The move, plus new proceeds to be raised by three fund companies through fund splits, was likely to pump nearly 100 billion yuan into the stock market, it said.
Sponsor Results:
