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China's shares ended a week-long falling streak to close higher yesterday after a late spurt of buying sparked by talk that regulators would lengthen a May Day trading break to two weeks, brokers said.
Punters bet the extended holiday could prove beneficial for bearish markets hammered by a domestic outbreak of the severe acute respiratory syndrome (SARS), as it would allow some of the pessimism to peter out.
Shanghai's B share index rose 1.52 percent to 119.845 points, while Shenzhen's gained 2.53 percent to 216.00. Hard currency B shares are open to Chinese and foreign investors.
The benchmark Shanghai composite index closed 3.4 percent higher at 1,537.691 points, snapping a week-long losing streak.
"After such a long break, the SARS outbreak might even have come under control and the market would stabilize," said a senior trader based in Shanghai.
Buying focused on large-caps which had risen steadily until last Monday, when fears mounted about an outbreak of SARS after the government announced a spike in infections.
Punters also bet market heavyweights would benefit from a government scheme that would soon allow the first foreign investors into domestic share markets, brokers said.
Sinopec Corp, the largest capitalized firm on the markets, rose more than 6 percent to close at 3.69 yuan (US$0.45) after a 5.2 percent dip over the past week.
CITIC Securities Co, the first brokerage listed on mainland bourses, rose its 10 percent daily limit to 8.31 yuan (US$1). It had fallen 4.1 percent last week.
But punters sold poor performers such as Eastcom. The telecoms equipment maker was Shanghai's biggest decliner with a drop of 5.74 percent to US$0.641.
It reported a net loss of 117.42 million yuan (US$14 million) in the first quarter of 2003, against a net profit of 6.66 million yuan (US$800,000) a year ago, blaming intensifying competition.
Shanghai's yuan-denominated A share index rose 3.43 percent to 1,609.207 points while its Shenzhen counterpart climbed 2.49 percent to 447.93.
Guangzhou Baiyun Airport rose 48.81 percent from its 5.88 yuan (US$0.71) debut price to close at 8.75 yuan (US$1.05). Analysts said Baiyun's debut was clouded by expectations that SARS would hurt domestic aviation.
China said yesterday SARS had killed nine more people and infected another 203, taking the nationwide death toll to 139 and infections to 3,106.
China's yuan closed flat against the US dollar at 8.2770, holding steady despite fears about the spread of the deadly flu-like virus that swept across other markets, dealers said.
The yuan, not fully convertible on the capital account, was stuck between 8.2769 to 8.2771 all day, near the strong end of a trading range of 8.2760 to 8.2800, which the central People's Bank of China enforces.
Turnover rose to US$530 million from Friday's US$430 million.
"As the yuan's exchange rate is tightly controlled, it is rarely affected by factors other than dollar demand and supply arising from trade flows," said a dealer at a domestic bank.
In contrast, the outbreak of SARS depressed China's share prices and commodities futures last week.
On Monday, the yuan weakened against the Japanese currency to 6.8863 per 100 yen from Friday's 6.8710 and softened to 9.1518 versus the euro from 9.1267. It closed a notch lower against the Hong Kong dollar at 1.0610.
(China Daily April 29, 2003)
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