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China's shares inched higher yesterday on bargain hunting in drug stocks after fears over the SARS virus gave them a much-needed boost, brokers said.
But Hainan Airlines Co Ltd and other travel-related counters slipped after a new SARS case surfaced in Singapore and unnerved investors. Hainan fell 2.3 percent to finish the day at 47.5 US cents.
The benchmark Shanghai composite index, grouping hard-currency B shares for foreigners and yuan-denominated A shares, rose 0.22 percent to 1,423.18 points. The Shenzhen's gained 12.05 points, or 0.38 percent, to end at 3148.67 yesterday.
"The SARS news could be a stimulus to shop for bargains among drug counters, which have dropped a lot recently," said analyst Zhang Qi at Haitong Securities.
Accord Pharmaceutical Co Ltd was the biggest B-share gainer, jumping 2.64 percent to HK$3.89 (49.9 US cents). It had fallen to a year's low of HK$3.65 (46.8 US cents) on August 20 after posting a first-half loss.
"But SARS is an excuse for speculation rather than a change in fundamentals," Zhang said. "The short-term gains of drug counters will not prop up a bearish market, longer term."
Analysts said the Shanghai composite index would move narrowly around 1,400 points in the short run as investors took to the sidelines. They are fretting about a looming share offer from a unit of the massive Three Gorges Dam project.
"Trade was lighter than in recent sessions as investors were reluctant to buy stocks ahead of the initial public offering (IPO)," said analyst Wang Xiaolu at Dapeng Securities.
Yesterday, SARS fears soured sentiment on tourist-related counters, which had begun to recoup losses before the week-long October 1 National Day holiday, brokers said.
China was the hardest-hit by SARS. The disease devastated the aviation and tourist industry before it was contained in June.
Huangshan Tourism Development Co Ltd's B shares were among the biggest decliners, down 1.64 percent at 48 US cents.
Shandong Airlines Co Ltd was the worst performer in Shenzhen with a 1.96 percent decrease to HK$3.00 (38.4 US cents).
The Shanghai B-share index edged up 0.28 percent to 98.991 points, while its Shenzhen counterpart rose 0.19 percent to 224.21.
Shanghai copper futures fell from recent contract highs to close steeply lower on yesterday as the London Metal Exchange posted sharp losses, traders said.
The most active January contract declined 170 yuan (US$20.60) to 18,110 yuan (US$2,187) a ton, while the rest lost 160 yuan (US$19.30) to 220 yuan (US$26.60). Combined volume fell to a moderate 55,818 lots from Tuesday's 61,726 lots.
"The copper market has risen very strongly recently and we expect futures to consolidate before the next trend emerges," a Shanghai trader said.
LME three-month copper tumbled by US$20 to end Tuesday's kerb session at US$1,794 a ton. Sellers cashed in on the recent rally which had pushed the contract to a 29-month high of US$1,829 on Friday, traders said.
Shanghai's spot copper fell 120-150 yuan (US$14.50-US$18.10) to trade in a range of 18,040 yuan to 18,140 yuan (US$2193.50-US$2205.70) on Tuesday, in line with the futures trend.
Shanghai aluminium futures ended 70 yuan (US$8.50) to 120 yuan (US$14.50) lower. Combined volume rose to an active 10,568 lots from Tuesday's thin 4,472 lots.
LME aluminium slid below its key support of US$1,400 to end at US$1,391 on Tuesday, versus US$1,437 a day before.
China's yuan ended steady versus the US dollar at 8.2770, at the stronger end of its managed trading range.
(China Daily September 11, 2003)
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