China's shares ended a touch higher yesterday as investors picked up telecoms stocks after a recent fall, but overall sentiment remained cautious ahead of the mid-year corporate results season, brokers said.
The benchmark Shanghai composite index, grouping hard currency B shares and yuan-denominated A shares, edged up 0.7 percent to 1,512.019 points.
Shenzhen's sub-index rose 22.82 points, or 0.69 percent, to 3,329.52.
Shanghai's B-share index nudged up 0.7 percent to 112.567 points while Shenzhen's rose 0.37 percent to 221.68. Hard currency B shares are open to Chinese and foreign investors.
Telecoms-gear maker Nanjing Putian Telecommunications Co was one of the best B-share performers in Shenzhen, rising 2.63 percent to HK$3.90 (US$0.514). It had fallen more than 4 percent over the last two weeks.
China United Telecommunications Corp, the country's second-largest mobile operator, closed 0.6 percent higher at 3.32 yuan (US$0.408).
"We expect the index to be rangebound at the current level in the short term as interim corporate results will keep many investors sidelined," said analyst Duan Kai at Great Wall Securities.
More than 1,200 listed firms are required to report first-half earnings from the beginning of July until August 31.
Bucking the uptrend were shares in auto firms such as Chongqing Chang'anAutomobile and Jiangling Motor.
Jiangling Motor was the third-biggest B share decliner in Shenzhen with a 1.31 percent drop to HK$5.29 (US$0.687). It has gained more than 50 percent since early this year.
China's largest minivan maker Chang'an Automobile was one of the biggest B share decliners in Shenzhen, sliding 0.68 percent to HK$7.30 (US$0.949).
Auto stocks have been favored since late last year due to a car sales boom throughout the country.
Jiangling shares are up more than 50 percent since early this year, while Chang'anhas more than doubled during the same period.
On the foreign exchange market, China's yuan ended flat at 8.2773 to the US dollar yesterday, staying at the strong end of its tightly managed trading range.
The yuan stuck between 8.2771 and 8.2774 throughout the session, near the firm end of a wafer-thin band of 8.2760 to 8.2800 that the central People's Bank of China usually enforces. Turnover fell to a thin US$510 million from US$610 million on Monday.
Healthy trade surpluses and foreign investment have kept the yuan, which is not freely convertible under the capital account, at the stronger end of its managed range over the past two years.
"Demand and supply have reached a balance at current levels," said a domestic bank dealer. "Both buyers and sellers have no intention of pushing the yuan's rate up or down sharply."
Dealers said the yuan will move narrowly between 8.2770 and 8.2775 in the near term.
They said China is exploring ways to make its rigid foreign exchange regime more flexible, but is unlikely to effect a revaluation this year despite pressure from countries like South Korea, Japan and the United States.
The yuan rose to 7.0135 against 100 Japanese yen from 7.0162 on Monday and firmed versus the euro to 9.3692 from 9.4740. It ended one notch stronger against the Hong Kong dollar at 1.06010.
Shanghai copper futures mirrored a rise on the London Metal Exchange to end higher yesterday, but the market was doubtful whether that rise could persist amid scarce market leads, traders said.
The most active November 2003 contract closed 70 yuan (US$8.4) higher at 17,330 yuan (US$2,094) per ton, while other contracts gained 30 to 110 yuan (US$13.2). Combined volume rose to a moderate 51,640 lots from Monday's paltry 29,414 lots.
(China Daily July 9, 2003)
