CCTV.com - CNTV English - CCTV News


Homepage > News > Biz >

Stocks extend biggest gain in four months

10-12-2010 11:16 BJT

Fed measures may weaken dollar, make commodities more attractive

SHANGHAI - Mainland stocks rose, extending their biggest gain in four months, as investors speculated the US Federal Reserve's possible measures to boost the economy by buying debt will weaken the dollar and make commodity shares more attractive.

"The market was overly pessimistic about the economic outlook," said Wu Kan, Shanghai-based fund manager at Dazhong Insurance Co, which oversees $285 million.

"Judging from corporate earnings and qualitative easing measures to be taken by central banks globally, investors are revising their views and turning optimistic gradually," said Wu.

The Shanghai Composite Index gained 68.2, or 2.49 percent, to 2806.94 on Monday, the highest since May 5. The measure surged 3.1 percent on Friday after Moody's Investors Service put the nation's debt rating on review for a possible upgrade, retail sales surged during the National Day holiday and the yuan strengthened. The CSI 300 Index rose 2.91 percent to 3132.9 on Monday.

The Shanghai index has climbed 19 percent from this year's low on July 5 on the prospect China's economic growth will accelerate. Citing the outlook for the economy, Moody's said last week it may upgrade the debt rating within three months from the fifth-highest ranking of A1. The yuan's rise to the strongest against the dollar since the central bank unified official and market exchange rates at the end of 1993 is also spurring fund inflows into China.

The Standard & Poor's 500 Index rose 0.6 percent on Friday, rounding up a 1.7 percent gain last week. US employers cut 95,000 workers in September, Labor Department figures showed. The median estimate of economists surveyed by Bloomberg News was a drop of 5,000.

The prospect of quantitative easing is spurring gains for commodity producers as increasing the money supply may boost inflation, Wu said. Investors are buying energy and metal producers as a hedge against a weaker dollar, he said.

The Shanghai gauge has plunged 16 percent this year, the world's third-worst performer, as the government introduced tightening measures ranging from restrictions on multi-house purchases to a 22 percent cutback on annual new lending by banks.

China may extend its post-holiday rally as economic fundamentals remain solid and valuations aren't demanding, according to China International Capital Corp (CICC).

"The rally probably has legs," Hao Hong, Beijing-based global equity strategist at CICC, said in an e-mail. "Despite such a strong performance, our technical overbought/oversold index is still about neutral, suggesting some further gains ahead from a technical perspective."

Hang Seng gains

Hong Kong stocks rose, pushing the benchmark index to its highest level in more than two years.

The Hang Seng Index rose 1.15 percent to 23207.31 on Monday.

The Hang Seng China Enterprises Index of H shares of mainland companies rose 1.52 percent to 12951 on Monday.

Editor:Xiong Qu |Source: China Daily

Hot Videos view more

The celebrations are still continuing as the victorious coach, Joachim Loew, has been honored for his achievement in his hometown of Freiburg.
Germany coach Loew honored in hometown of Freiburg

Chinese men´s national team continued its preparations for next year´s Asian Cup, as they managed a one-all draw against visitors Jordan during a football friendly in Harbin, the capital city of Northeast China´s Heilongjiang Province.
China held to 1-1 draw by Jordan

The defending world champs came into the contest with a perfect 6-and-oh record, but they would be in for a tough first half before opening things up in the second.
USA beat Slovenia 119-76 in quarter-finals

Hot Stories more

UK authorities believe killer of James Foley is a British national

Across the UK the hunt is on for James Foley’s killer, who authorities believe is a British national. As Richard Bestic reports from London, Prime Minister David Cameron cut short his summer break to lead his government’s response.

Israeli war jets renews Gaza strike as truce talks stalled

Three Palestinians were killed and 40 others wounded in the intensive Israeli war jets´ airstrikes on the Gaza city on Tuesday night, shortly before an end of a 24-hour ceasefire in the Gaza Strip,

Missouri police arrest dozens after violent night

As the protests in the town of Ferguson, Missouri turned violent with police facing ´heavy gunfire´ from some ´criminal elements´, cops fired tear gas, stun grenades and arrested 31 demonstrators on Monday night.

Picture in news more

More Video News

Choose TV Program