Shanghai's key stock index rose slightly in the morning session as metals shares including Zhongjin Gold Corp advanced after commodities rose to records.

The Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B shares, added 0.20 percent, or 10.99 points, to 5,397.52 at 11:30 am today.

Gainers in the Shanghai market outnumbered losers 589 to 184 and 75 were unchanged.

The Shenzhen Composite Index, which covers the smaller mainland stock market, was up 1.12 percent, or 16.86 points, to 1,522.42.

Zhongjin Gold, the largest publicly traded gold miner by market value in China, jumped 3.02 percent, or 4.05 yuan (56 US cents), to 138.20 yuan. Shandong Gold Mining Co, the nation's second-largest gold miner, added 1.31 percent, or 2.87 yuan, to 222 yuan.

Zhongjin yesterday said it won conditional approval from the China Securities Regulatory Commission to sell stock and buy assets.

Gold futures surged by as much as 10 percent, the daily maximum, when opening on the first day of trading on the Shanghai Futures Exchange today.

The rise in the futures market may lead to a surge among gold producers in Shanghai's stock market, Sun Zhaoxue, chairman of the China Gold Association, said this morning.

Jiangxi Copper Co, China's second-biggest producer of the metal, rose 3.89 percent, or 2.22 yuan, to 59.25 yuan.

Copper surged to a seven-week high in New York and gold also soared to a record. An ounce of gold for February delivery climbed as high as US$884 in New York, topping by almost US$10 its previous record of US$875 set in 1980. It later settled at US$880.30, up US$18.30.

Airlines declined this morning after shareholders of Shanghai-based China Eastern Airlines vetoed Singapore Airlines Ltd's bid for a 24 percent stake in the carrier for HK$7.16 billion (US$918 million) yesterday. The rejection clears the way for Air China Ltd's parent to make a higher offer.

Air China, the world's biggest airline by market value, fell 0.92 percent, or 0.26 yuan, to 28 yuan. China Eastern, the nation's third-largest carrier by fleet size, shed 0.87 percent, or 0.18 yuan, to 20.45 yuan.

SIA and parent Temasek Holdings Pte agreed to buy 24 percent of China Eastern to gain a base in China, the world's second-largest aviation market.

But China National Aviation, Air China Ltd's parent, holder of about 10 percent of China Eastern, said on January 6 that it would make a counter-bid of at least HK$5 per share if the Singapore deal is rejected. China Eastern planned to sell new shares to its parent and the Singaporean investors at HK$3.80 apiece.

(Shanghai Daily January 9, 2008)