SHANGHAI, Dec 3 — Chinese stocks rose in active trading today after Wall Street gained and a government fund announced a large purchase of shares in a major state-owned commercial bank.
The benchmark Shanghai Composite Index jumped 4 per cent, or 75.78 points, to close at 1965.41. The Shenzhen Composite Index for the country’s smaller second exchange climbed 3.9 per cent to 584.43.
Financial stocks rose after Central Huijin Investment Company Ltd, a subsidiary of China’s sovereign wealth fund, announced it bought more than 70 million shares of China Construction Bank Ltd, the country’s second-largest commercial bank, between Sept 23 and Nov 28. Huijing said the purchases were meant to support the stock market, which has lost some 60 per cent of its value over the past year.
Investors also were encouraged by a 3.3 per cent overnight rise in the Dow Jones Industrial Average, analysts said.
Construction Bank rose 5.2 per cent to 4.25 yuan and Industrial & Commercial Bank of China Ltd, China’s biggest commercial lender, added 2.9 per cent to 3.87 yuan. Bank of China Ltd climbed 3.2 per cent to 3.23 yuan and midsize lender Pudong Development Bank Ltd soared 6.9 per cent to 12.9 yuan.
Textile and garment companies, major exporters, jumped after recent sharp falls of the Chinese yuan against the US dollar, which could help to boost exports by reducing the price of Chinese goods in foreign markets.
The yuan weakened to 6.8910 to the US dollar around 0800 GMT, down from yesterday’s close of 6.87860.
Profits of Chinese exporters have been hurt by the sharp fall in demand due to the global economic slowdown.
The government’s Xinhua News Agency quoted Vice Premier Wang Qishan, a senior economic official, as saying the government would do its best to “stabilise the export market”, though the report gave no details.
Jiangsu Sanyou Group, a clothing exporter, advanced by the daily maxim of 10 per cent to 3.63 yuan. Seven Wolves Industry Corp, a producer of men’s suits, advanced 4.3 per cent to 10.64 yuan. Shirt maker Shanshan Ltd rose 4.2 per cent to 5.5 yuan. — AP
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