Stocks in Shanghai rose today with the benchmark rebounding from the biggest two-day decline on record.

 

The Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B shares, jumped 3.14 percent, or 143.3 points, to 4,703.05 at 3pm.

 

The index tumbled 7.22 percent yesterday and 4.62 percent on Monday.

 

Gainers in the Shanghai market outnumbered losers 743 to 78 and 150 were unchanged.

 

The Shenzhen Composite Index, which covers the smaller mainland stock market, rose 4.76 percent, or 63.62 points, to 1,400.86.

 

Bank of Communications and China Minsheng Banking Corp were among the banks that posted gains today after the two lenders reported high profit growth.

 

Bank of Communications, partly owned by HSBC Holdings Plc, increased 4.25 percent, or 0.55 yuan (7 US cents), to 13.50 yuan. Bank of Communications said profit increased more than 60 percent from a year earlier to 12.6 billion yuan in 2007.

 

Minsheng Bank, the nation's only listed privately-controlled lender, added 3.2 percent, or 0.42 yuan, to close at 13.55 yuan. The lender said net income last year probably rose more than 60 percent on higher interest income. Net income was 3.8 billion yuan in 2006.

 

But the profit report of Bank of China led it lower today.

 

BOC, the nation's third biggest lender, shed 2.88 percent, or 0.182 yuan, to finish at 6.07 yuan. The bank sank as much as the daily cap of 10 percent this morning.

 

The lender said yesterday that its 2007 profit after tax rose after provisions for its investments in US subprime mortgages, and rejected a report that it may post a loss as "unfounded.''

 

Shares of the lender have fallen 20 percent in Shanghai and 35 percent in Hong Kong since October 30, when it reported profit growth that trailed competitors because of losses on its US$7.95 billion of subprime-related investments. The drop also came amid a rout in stock markets worldwide triggered by concerns that spillover from the US housing recession may crimp global growth.

 

In other sectors, China Petroleum & Chemical Corp, also known as Sinopec, the nation's largest oil refiner, gained 3.95 percent, or 0.72 yuan, to 18.97 yuan.

 

The company has proven reserves of 102 million metric tons of oil reserves at its largest oil field, 13 percent more than a company target, Sinopec said in a newsletter today.

 

Guangdong Midea Electric Appliances Co, China's biggest publicly traded appliance maker by market value, won approval from the nation's top economic planning agency to build an air-conditioner assembly plant in Vietnam. The stock jumped 8.39 percent, or 3.60 yuan, to 46.50 yuan.

 

Airlines also erased their previous losses and climbed today.

 

China Eastern, the nation's third-largest carrier by fleet size, increased 2.52 percent, or 0.44 yuan, to 17.91 yuan while Air China, the nation's biggest carrier by market value, inched up 0.61 percent, or 0.15 yuan, to 24.88 yuan. China Southern Airlines Co gained 4.42 percent, or 0.95 yuan, to 22.42 yuan.

 

China Southern Airlines Co and China Eastern Airlines Corp have agreed to cooperate in areas including marketing and procurement, Shanghai Securities News said today, citing China Southern Chairman Liu Shaoyong.

 

The two carriers will start "overall cooperation'' under an agreement signed yesterday, after talking for more than one year, Shanghai Securities News said. The cooperation will cover marketing, aircraft purchases, ground services and other areas, the newspaper said.

 

China Eastern has received a bid from larger rival Air China's affiliate to buy no more than a 30 percent stake. China Eastern's management is trying to revive an agreement with Singapore Airlines Ltd that was vetoed by shareholders earlier this month.

 

Japan's benchmark Nikkei index gained 2.04 percent today as investors rushed to look for bargains after an emergency interest rate cut by the US Federal Reserve.

 

Australia's benchmark index rebounded 4.4 percent, snapping a 12-day losing streak.

 

In Hong Kong, the Hang Seng index, which had plummeted 13.6 percent the last two days, surged 7.5 percent at the opening before trimming gains to 5.3 percent by midday.

 

India's Sensex index jumped 4.6 percent at the opening before slipping back slightly.

 

The US central bank yesterday slashed the target overnight lending rate to 3.5 percent from 4.25 percent, the biggest one-day cut since 1991. It also indicated further rate cuts were likely.

 

(Shanghai Daily January 23, 2008)