Tags: china | shares | stimulus

China Sticks to Stimulus, Shares Push Higher

Wednesday, 02 Dec 2009 02:23 PM

Chinese shares rose for a third day Wednesday as uncertainty over the direction of government economic policy cleared, led by bank shares.

The benchmark Shanghai Composite Index jumped 34.39 points, or 1.1 percent, to close at 3,269.75. The Shenzhen Composite Index for China's smaller second exchange edged up 1.3 percent to 1,228.24.

Investors were still buoyed by the government's pledge Friday to continue its stimulus for the coming year despite a recent upturn in growth, said Zheng Gang, an analyst for Yingda Securities in the southern city of Shenzhen.

"That cleared up uncertainty in the market," Zheng said.

Bank shares rose on news reports that Central Huijin Investment Co., a branch of the country's sovereign wealth fund and a major shareholder in China's biggest state banks, may allow the lenders to replenish their capital from earnings rather than raising new money from investors. That would avoid the need to dilute existing shareholders.

Industrial & Commercial Bank of China Ltd., China's biggest commercial lender, rose 1.3 percent to 5.33 yuan. China Construction Bank Ltd. added 0.8 percent to 6.01 yuan.

Gold miners rose on higher boullion prices. Shandong Gold Mining Co. advanced 8.2 percent to 91.88 yuan, while Zijin Mining Group Co. soared 5.5 percent to 11.31 yuan.

Real estate shares gained after Caijing, China's leading business magazine, reported the government will take steps to encourage housing sales. China Vanke Ltd., the country's biggest developer, rose 2.2 percent to 11.75 yuan, while rival Poly Real Estate Group added 2.8 percent to 25.6 yuan.

In currency markets, the yuan weakened to 6.8272 to the U.S. dollar, down from Tuesday's close of 6.8266.

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Chinese shares rose for a third day Wednesday as uncertainty over the direction of government economic policy cleared, led by bank shares.The benchmark Shanghai Composite Index jumped 34.39 points, or 1.1 percent, to close at 3,269.75. The Shenzhen Composite Index for...
china,shares,stimulus
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2009-23-02
Wednesday, 02 Dec 2009 02:23 PM
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