Mainland stocks in energy, finance sectors recover
After the sharp fall to surge more than 6 percent yesterday, the major mainland index began to rally, mainly boosted by heavy weight stocks in the energy and financial sectors.
The benchmark Shanghai Composite Index and Shenzhen Component Index both soared several percent especially Shanghai Composite Index had 884 stocks closing higher.
The amount of the combined turnover on the two bourses was 120.35 billion yuan, which decreased 16.7% from Tuesday.
According to analysts, they have expected the turnaround would appear because of the short-term pressure by the huge stimulus package. The mainland’s major index shed 6.31 percent on Tuesday due to growing concern about the global economy.
Mao Nan, an analyst at Orient Securities Co Ltd. said that owe to the government’s recent bold fiscal move, the market confidence has fundamentally grown and there are still much space for index to get further advancement.
The accounts of China’s newly opened stock investment soared 55% to 261,846 in the week ended Nov 14 from the previous week.
The stock market can reflect the country’s economy, which will definitely be stimulate by government’s policy to boost domestic demand, Mao estimated that the interest rate cut would be carried out in near future.
Based on vice-president of Asia-Pacific equity research for Standard & Poor’s, Lorraine Tan’s opinion, although mainland stocks cannot be separated completely from overseas markets, the selling pressure here is much greater than in other markets due to the sharp fall in the past 10 months. “The Shanghai index was down 67 percent by October, and probably has to consolidate.”
Shares in Chinese oil refiners restarted amid speculation that China would reform the fuel price, which would better refiner’s margins. Sinopec surged to its daily limit to 8.37 yuan several days ago, while rival PetroChina jumped 7.49% to finish at 11.91 yuan.
All shares in the financial sector gained in Nov 20th’s session. But Tan noted that the bad news still existed in the process of economic front, and the stock market would stay fluctuant. “We expect more details of China’s stimulus package to come out, and a better performance will probably be seen in the second half of next year.”
Are you interested in the business opportunities in China?
China is one of the world’s great growth markets and is likely to be for many years to come. Foreign companies often face difficulties in assessing Chinese market demand and enacting effective strategies because of the language barriers, culture differences, and high expense.
BPOVIA is the leading virtual assistant and Knowledge process outsourcing (KPO) service provider in China. BPOVIA is the only virtual assistant company ever been nominated for the prestigious “Red Herring 100 Asia” Awards 2008. Combines international perspective with local know-how, BPOVIA can provide our clients China business development service and help our clients doing successful business in China.
Please visit http://www.BPOVIA.com/ for details about our service.
Popularity: 14%