Shanghai, Hong Kong Rally; Resource Stocks Lead

Chandrasekhar Atreya
04 Jan, 2011
New York City

Stocks in Hong closed higher as the index gained in a longest rally in two months. Shanghai index gained on the first day of trading with copper and coal miners leading. December index for non-manufacturing sector gained after declining for two months.

[R]5:00 PM Hong Kong, China – Stocks in Hong closed higher as the index gained in a longest rally in two months. Shanghai index gained on the first day of trading with copper and coal miners leading. December index for non-manufacturing sector gained after declining for two months.[/R]

Stocks in Shanghai rose for the fourth day in a row and in Hong Kong gained for the sixth day on better-than-expected expansion in U.S. manufacturing activities. Hong Kong index gained in the longest rally in two months.

The Shanghai Composite Index gained 1.59% or 44.57 to 2,852.65 and the CSI 300 Index surged 1.96% or 61.42 to 3,198.68.

The Hang Seng Index in Hong Kong gained 0.99% or 232.43 to close at 23,668.48.

Several major cities in China, including Shanghai, Beijing, Guangzhou, Xiamen and Fuzhou will follow a policy that restricts a family to buy just one home this year in a bid to arrest a rebound in property prices.

China Business News cited on Monday housing officials from these cities as saying they have no plans to cancel the policy that applies to both new and existing homes.

Oil prices rose past the $92 a barrel on Monday, as the New Year began with the prospect of still higher energy prices in the year as investors estimate global economic recovery to continue.

Foreign direct investment in Shanghai city grew 15.1% in 2010, more than three times the rate posted the previous year, the Shanghai Commission of Commerce said on Friday.

The city attracted $15.3 billion in contracted foreign direct investment in 2010, up more than 15% over the earlier year and most of the investment was in industries encouraged by the local government, the commission said.

China will expand from today a trial nationwide that allows exporters to keep foreign exchange overseas in a bid to balance the country’s international payments.

Exporters with a clean record in the past two years can apply to the State Administration of Foreign Exchange to keep forex overseas, the currency regulator said on its Web site on Friday.

China will continue its subsidies for energy-efficient cars in 2011 in a move that will help the world’s largest auto market as other factors threaten to slow its rapid growth.

The Ministry of Finance said on Friday that subsidies for energy-efficient vehicles and new energy vehicles will be extended through 2011 to help cut emissions and did not elaborate any more.

The third natural gas pipeline from northwest China’s Shaanxi Province to Beijing was completed on Friday and will start supplies next Tuesday, an official at China National Petroleum Corp said.

Zhao Yujian, head of CNPC’s pipeline bureau, said at the new pipeline’s completion ceremony that the 896-kilometer pipeline can pump up to 15 billion cubic meters of natural gas annually.

The Purchasing Manager’s Index for non-manufacturing sector index rose in December last year after declining for two months, the China Federation of Logistics and Purchasing said Monday.

The index in December rose to 56.5%, 3.3 percentage points higher than a month earlier, the agency said on its Web site.

Stock Movers

Flooding in Queensland leading to reduced supplies of coal spurred coal producers of China.

China Shenhua Energy Co rose 1.9% to 25.18 yuan and Yanzhou Coal Mining Co added 2% and Datong Coal Industry Co advanced 2.2% to yuan.

Commodity producers gained as copper prices rose in London and oil prices remained above the $91 a barrel mark in New York.

Jiangxi Copper Co surged 4.1% to 47.03 yuan. PetroChina Co rose 1.2% to 11.35 yuan and Aluminum Corp of China rose 2.7% to 10.41 yuan.

China Vanke Co jumped 6.8% to 8.78 yuan while Gemdale Corp surged by the daily limit of 10% to 6.80 yuan on media reports that property tax levy may be delayed.