Stocks News
- Stocks rebound as airline shares shine
Date: 26-Nov-2007 Sources: (Shenzhen Daily)
MAINLAND stocks rose Friday as airlines and other shares surged on gains in the yuan, but broader worries over the global economy capped the advance.
The benchmark Shanghai Composite Index added 1 percent, or 47.96 points, to 5,032.13, recovering from a 4.4 percent fall Thursday that took the index to its lowest close since Aug. 22. The Shenzhen Composite Index rose 1.5 percent to 1,272.14.
Airline companies rose after the official rate for the U.S. dollar against the yuan was set at a record low level of 7.3992. Airlines can benefit from a stronger yuan because they often carry large amounts of foreign currency-denominated debt.
Air China gained 7.3 percent to 20.66 yuan (US$2.79). China Southern Airlines surged by the daily 10 percent limit to 23.44 yuan and China Eastern Airlines ended 6.6 percent higher at 13.91 yuan.
PetroChina fell for the fifth straight session, losing 1.5 percent to 34.59 yuan. Analysts say PetroChina remains overpriced and that its fair value should be under 30 yuan.
Nonferrous metal firms also declined due to the recent retreat in global metals prices.
Yunnan Copper lost 1.5 percent to 49.90 yuan. Yunnan Tin fell 5 percent to 55.30 yuan and aluminum producer Henan Zhongfu Industry slipped 4.5 percent to 27.43 yuan.
Although China's markets remain relatively isolated, investors are reacting to wider gloom over the U.S. economic outlook due to the fallout from so-called subprime mortgages, analysts said.
'Uncertainty over the impact of the U.S. subprime problems will likely affect Chinese bourses, dragging the benchmark index toward 4,800,'said Li Wenhui, an analyst at Huatai Securities.
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