CHINA’S A SHARES got off to a bullish start this week, with the benchmark Shanghai Composite Index finishing up 2.6% today at 3,051.42.
Meanwhile, the Hang Seng Index in Hong Kong added 0.5% to end the day at 23,627.91.
Strong results from energy counters like Yanzhou Coal Mining Company (SHA: 600188; HK: 1171; NYSE: YZC) led the rally, with the resources firm rising its daily 10% upside limit to 31.33 yuan.
China’s fourth largest coal miner, which recently paid around three bln usd for Australia's Felix Resources Ltd, announced that its third quarter bottom line more than tripled on a year-on-year basis to 3.7 bln yuan.
Yanzhou and domestic peers have been buoyed of late by the 28% year-on-year rise in third quarter benchmark coal prices.
Zijin Mining Group Company Ltd (SHA: 601899; HK: 2899) was also a big winner today, adding 5.9% to close at 10.60 yuan.
The financials and metals sector sub-indices were the two best performers today, rising 6.8% and 4.5%, respectively.
Financial counters including banks and brokerages which are heavily weighted on the Shanghai Composite, continued to outperform following the People's Bank of China rate hike last week and the sustained strong daily trading turnover which itself is spurred on by the benchmark index once again breaking through and finishing above the psychologically-significant 3,000 level.
Trading volume for stocks comprising the benchmark index surged nearly 30% today to 254.6 bln yuan, up from the still respectable 197.2 bln yuan which traded hands on Friday.
Most analysts cited in the Chinese language piece in SinaFinance expect A shares to hover above the 3,000 mark in the near term but are not likely to finish higher than 3,200 anytime soon, adding that “firm support” is expected from the 250-day moving average which now stands at 2,892.
However, some market watchers anticipated a more bullish near-term performance, with 3,400 fair game for a testing level before year end on higher yuan exchange rate forecasts and the fund attention it attracts.
They added that the property sector – the darling of China’s capital markets for much of the post-July recovery – is now seeing some capital flight thanks to new regulations placed on developers last month, and financial institutions and metals/mining firms were reaping the benefit of the shift in attention.
Thanks to the surging turnover and the commission income it brings, Citic Securities (SHA: 600030) jumped 9.9% today to close at 16.53 yuan while GF Securities (SZA: 000776) added 10%, its daily upside limit, to finish at 58.29 yuan and Haitong Securities Co Ltd (SHA: 600837) rose 9.97% to 12.35 yuan.
Market watchers also said investors took cheer from last week’s 0.25% interest rate hike as it showed that regulators still had confidence in the sustained strong growth of the country’s economy, which expanded by 9.6% in the third quarter on a year-on-year basis.
The continued slide in the US dollar brought another round of buying in metal counters -- commodities which are priced in the currency.
Base metal miner Yunnan Copper (SZA: 000878) rose its daily 10% upside limit to 31.10 yuan while domestic peer Jiangxi Copper (SHA: 600362) also topped out at 48.74 yuan.
Meanwhile, Xiamen Tungsten Co Ltd (SHA:600549), BGRIMM Magnetic Materials & Technology (
See also:
CHINA SHARES Facing Test, Focus On Financials
WHAT RATE HIKE? A Shares Protect 3,000 Despite Central Bank Action
PROFIT TAKERS Finally Appear After 7-Day Bull Run
