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China's shares rose slightly yesterday as gains in recently battered textile stocks such as Shanghai Sanmao Textile Co helped the market rebound, after losses earlier in the day.
The benchmark Shanghai composite index, grouping hard-currency B shares for foreigners and yuan-denominated A shares, edged up 0.09 percent to 1447.850 points.
Bargain hunting emerged on selected stocks, with Shanghai Sanmao's A shares rising its 10 percent daily limit to 7.56 yuan (US$0.91).
The shares had dropped to their year-low of 6.71 yuan (US$0.81) at the end of August after the fabric maker reported a 77.07 percent plunge in half-year earnings.
Tianshan Woollen Textile Co Ltd, based in the western region of Xinjiang, also bolstered the market, surging 10 percent to 5.27 yuan (US$0.64) after recent heavy losses.
Analysts said the rally would soon peter out as sentiment remained poor, due mainly to a number of stock offers and a tightening of bank lending.
They forecast the Shanghai composite index would move narrowly in the near term and see resistance at 1,500 points.
"Recent falls helped ease persistent selling pressure, but the market lacks momentum to extend its rally," said analyst Zhang Qi at Haitong Securities. "The market is short of funds amid persistently bearish sentiment."
Investors punished companies planning to issue shares.
Department store operator Nanjing Centre Emporium Co Ltd was among the biggest decliners with a 2.84 percent fall to 8.88 yuan (US$1.1), after announcing it would list 37.64 million employees' shares next Monday.
The Shanghai B-share index inched up 0.07 percent to 102.514 points, while its Shenzhen counterpart climbed 0.28 percent to 228.87.
On the foreign exchange market, China's yuan ended two notches higher versus the US dollar at 8.2768 yesterday, at the stronger end of its managed trading range.
The yuan moves in a band of 8.2760 to 8.2800 enforced by the central bank.
Turnover dropped to US$550 million from a heavy US$680 million on Tuesday.
The yuan weakened yesterday to 7.1264 against 100 Japanese yen from 7.0879, but firmed versus the euro to 8.9296 from 9.0250.
In the futures market, Shanghai copper futures closed almost unchanged yesterday, as Chinese investors cautiously waited to see whether the London Metal Exchange could breach resistance at US$1,800, traders said.
The most active January futures nudged up 10 yuan (US$1.2) to 18,080 yuan (US$2,184) a ton, with most other contracts finishing between 20 yuan (US$2.4) higher and 30 yuan (US$3.6) lower. Combined volume fell to a thin 41,750 lots from 56,998 lots on Tuesday.
LME three-month copper prices ended up US$14 at US$1,787 a ton in Tuesday's trade and kept steady in Asian trade yesterday, shy of the psychologically crucial US$1,800 level.
"Investors were cautious before the LME three-months tested resistance," said a Shanghai trader.
Spot copper in Shanghai was unchanged to trade in a range of 17,850 yuan (US$2,156) to 17,940 yuan (US$2,167) yesterday, tracking futures.
Shanghai aluminium futures ended between 10 yuan higher and 20 yuan lower yesterday, while combined volume dwindled to a thin 6,892 lots from Tuesday's 8,590 lots.
LME aluminium finished unchanged at US$1,434 on Tuesday.
(China Daily September 4, 2003)
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