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Index back to 2,900 points amid falling oil price

By Ding Qi (chinadaily.com.cn)
Updated: 2008-07-10 08:35

Market sentiment rebounded with surging stocks Wednesday as the Shanghai index edged up 105 points and recovered the 2,900-point front. Descending energy prices and optimism about the economy contributed to the boom.

The overnight slump of crude oil on Wall Street has lessened investors' inflation concern and gave the market a boost at the right time. The benchmark Shanghai Composite Index opened some 1 percent higher at 2,838.86 and climbed throughout trading. It settled 3.75 percent higher at 2,920.55, marking a third gaining day this week.

The Shenzhen Component Index also surged 4.07 percent to close at 10,355.37, taking back the 10,000-point ground after one depressing month.

Combined turnover of the two markets reached 160.5 billion yuan ($23.4 billion), expanding for three consecutive days. Gaining shares far outnumbered losers today by 1,398 to 92, as more than 70 stocks rose to the daily limit of 10 percent.

The real estate sector performed impressively today on market talks that the regulator may better consider the capital needs of fund-thirsty developers. During the past two months, the securities regulator has approved several property firms to raise additional funds from the stock market via share offer or corporate bonds. The moves may help to improve the sectors' cash flow under a tightening monetary environment. Shares of China Vanke, one of the nation's top developers, rose 8.1 percent to 10.01 yuan.

Other blue chips also recovered steadily today. PetroChina rose 3.24 percent to 15.63 yuan, still 10 percent below its initial public offering price. Financial heavyweights run even better as China Life, the nation's leading insurer, clinched to the 10 percent daily limit early in morning trading, adding a higher pitch to the whole financial sector.

The National Statistics Bureau is scheduled to release major economic figures for June next week, and market analysts believe that inflation pressure may ease with the falling food prices. Meanwhile, given the current price-earning ratio of the A shares diving to about 20, long-term investment opportunities have begun to take shape, which has encouraged investors returning to the market.