Stocks News
- Shanghai stock index advances above 5,000
Date: 30-Nov-2007 Sources: (Shenzhen Daily)
AIRLINE companies surged on a downturn in crude prices and blue chips rallied on bargain hunting Thursday, sending China's shares sharply higher a day after the benchmark index ended at a three-month low.
The benchmark Shanghai Composite Index, which tracks both A and B shares, ended up 4.2 percent at 5,003.33. The Shenzhen Composite Index rose 3.1 percent to 1,257.27.
'The Shanghai index may hold around 5,000 as investors are divided on the market's near-term direction, having little idea what kind of macroeconomic policies the government will map out next,'said Xu Yinghui, an analyst at Guotai Junan Securities.
Major securities newspapers ran front-page articles Thursday seeking to calm investor concerns over the recent decline.
The Shanghai Securities News said rumors that funds are exiting the market due to rising redemption pressure are untrue, while the Securities Times said share valuations are returning to normal after the recent market slump.
Most airline firms rose by their daily 10 percent limit after crude futures slumped to US$90.62 a barrel in the United States on Wednesday, their lowest close in nearly a month.
Analysts said that while airline shares aren't very attractive because of high valuations, they could still remain strong in the near term on falling fuel costs and the continued strength of the yuan, which relieves their foreign debt burden.
A number of blue chips also rose on institutional demand, boosting the overall market, said Zhou Lin, an analyst at Huatai Securities.
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