Chinese equities volatile on policy fears
Shanghai. May 9. INTERFAX-CHINA - Chinese equities started on a strong
note on Monday but were highly volatile for the rest of the week on
concerns of potential fresh tightening policies in reaction to economic
data continuing to point to high inflation.
The benchmark Shanghai composite index (SCI) eased 2.16 percent
finishing the week at 3,613.49 points while the Shenzhen component index
dropped 3.14 percent ending at 13,080.37 points.
Vice Premier Wang Qishan said on Friday that China will stick to its
tight monetary policy in the future to tame high inflationary pressure
and overheated fixed-asset investment growth.
The National Bureau of Statistics (NBS) is scheduled to publish April's
consumer price index (CPI) figure on Monday. Analysts expect April's CPI
to exceed 8 percent growth once again, which may trigger a fresh hike in
the reserve ratio or in interest rates by the central bank.
China's producer price index (PPI) in April topped 8.1 percent, the NBS
announced today.
"The PPI growth rate for April is 0.1 percent higher than that of the
previous month. I think the April CPI figure may stay at a high level,
at least leveling off at the first quarter level of 8 percent.
Therefore, the government might continue to intervene by implementing
new tight monetary policies," an analyst with Huatai Securities, who
wished to remain anonymous, told Interfax.
Metal shares were mixed in the week as investors were cautious overall.
Baosteel, the largest steelmaker in China, decreased 0.86 percent in the
week to RMB 13.80 ($1.98).
Smaller rival Wuhan Iron and Steel weakened 0.77 percent to RMB 16.81
($2.41).
Shoudu Iron and Steel shaved off 3.97 percent to RMB 6.29 ($0.90).
The performance of nonferrous metal shares was also varied, with Jiangxi
Copper dropping 2.57 percent to RMB 33.33 ($4.78).
Yunnan based Sino-Platinum Metals sank 21.07 percent to RMB 28.29
($4.05).
However, the Aluminum Corporation of China gained 1.65 percent to RMB
22.15 ($3.17).
Coal shares were broadly higher this week thanks to soaring crude oil
prices on the international commodities market.
China Shenhua, the largest coal company in China, rose 3.45 percent in
the week to RMB 50.05 ($7.17).
Smaller rival China Coal Energy gained 2.66 percent to RMB 20.10
($2.88).
However, PetroChina, the largest oil company in China, weakened 0.89
percent to RMB 17.91 ($2.57).
Domestic rival Sinopec dropped 3.11 percent to RMB 12.17 ($1.74) because
despite soaring oil prices, heavy windfall tax is likely to
substantially erode the earnings of both companies.
Telecom, media and technology shares were also in the spotlight this
week amid market reports that China may officially announce its
restructuring plans for the country's telecom industry next week.
China Unicom, the country's second largest mobile operator, soared 7.71
percent to RMB 9.96 ($1.42).
Telecommunications equipment maker ZTE surged 9.15 percent to RMB 67.51
($9.67).
-WV/CL
More...
|
