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China's shares ended higher yesterday on the back of improved global sentiment regarding technology and telecom shares, while hopes Shanghai will win its bid to host the 2010 World Expo boosted property and construction firms.
The benchmark Shanghai composite index, grouping both A and B shares, ended 0.94 percent higher at 1,408.843 points.
The Shenzhen index edged up 0.82 percent to 2,861.35.
Shenzhen's hard currency B-share index rose 1.05 percent to 193.06 and Shanghai's climbed 1.79 percent to 116.578.
"Punters are expecting Shanghai to host the trade and tourism fair, which will help boost many related industries such as real estate, construction, infrastructure and tourism," said Huatai Securities analyst Chen Huiqing.
But trade was slow. Turnover in B shares was only US$11.873 million in Shanghai and HK$42.655 million (US$5.47 million) in Shenzhen.
"Tiny turnover indicated most punters were very cautious and adopted a wait-and-see attitude for the moment," said Eagle Securities analyst Hu Weitao.
"Although the indices were up, the turnover was not correspondingly expanded, showing investors still lack sufficient confidence in the market," said Guotai Junan Securities analyst Xu linfeng.
Expo-related stocks in property, construction and tourism outperformed the broader market. Construction materials producer Shanghai Huili Building Materials Co rose 2.95 percent to US$0.629.
China Bicycles was the biggest B share gainer in Shenzhen with a rise of 4.78 percent to HK$2.19, brushing up against the 5 percent daily limit.
Li Xiaoping, vice-president of China Huarong Asset Management Co - the largest shareholder in China Bicycles - said yesterday the listed company was unlikely to be delisted and that Huarong was optimistic about turning the loss-making firm around.
Technology stocks also climbed after Wall Street investment banks issued upbeat reports on the beleaguered sector - a rare instance of overseas news influencing Chinese stock markets.
Microelectronic producer Huadong Tech was the biggest A-share gainer in Shenzhen, rising 7.37 percent to 6.7 yuan (81 US cents).
"China's stock market is getting more in line with global markets as technical and telecom shares strengthened after economic data from the US improved," said Everbright's Chen.
China's yuan closed a notch higher at a strong 8.2771 against the US dollar yesterday, buoyed by a steady inflow of hard currency from healthy exports, dealers said.
The Chinese currency moved narrowly, hitting an intraday high of 8.2771 and a low of 8.2773 with most transactions centered around 8.2772, Monday's close, dealers said.
"The yuan still moved near the firm end of the government-set trading range, with support from strong exports," said a US bank dealer in Shanghai.
The central People's Bank of China enforces a tight trading box of 8.2760 to 8.2800 for the yuan, which is not freely convertible on the capital account.
Dealers said the yuan would remain firm in the near term as exports were expected to boom over the Christmas and New Year holiday seasons.
(China Daily December 4, 2002)
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