Jiangxi Copper Co. and Yanzhou Coal Mining Co. led metal and energy producers higher as commodity prices advanced. China’s Central Bank Governor Zhou Xiaochuan said the government will take stock moves into consideration when making policies.
“Indications of a U.S. recovery may boost the market,” said Zhang Kun, a strategist at Guotai Junan Securities Co. in Shanghai. Zhou’s “comments gave some signals that China may not raise interest rate immediately or as soon as the investors had expected. That helps buying sentiment.”
The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, advanced 6.3 points, or 0.2 percent, to 2,900.05 at 9:49 a.m. The CSI 300 Index added 0.4 percent to 3,237.73.
The U.S. economy expanded 2.8 percent in the third quarter from a year earlier, quicker than the 2.5 percent estimate published last month, the Commerce Department will say Dec. 22, according to a Bloomberg News survey of economists. Spending by U.S. consumers rose 0.5 percent in November after a 0.4 percent increase in October, a separate Bloomberg survey showed before the Dec. 23 report.
The U.S. economy is picking up speed and may grow by 3 percent to 3.5 percent next year, former Federal Reserve Chairman Alan Greenspan said.
Market Reaction
“We are trying our best in making policy decisions to take the stock market reaction into account,” China Central Television reported on Dec. 18, citing Zhou. “But when you only have a limited number of policy tools, you can hardly cover all the bases.”
China increased interest rates in October for the first time since 2007 as inflation reached 4.4 percent on an annual basis, the highest since September 2008. Since then, the central bank has raised reserve requirements for lenders three times in five weeks. The last increase was on Dec. 10.
China’s stocks may rise until the Chinese New Year as inflation is likely to ease “significantly” in December because of decreases in vegetable prices, according to China International Capital Corp.
Investment and export-related stocks will outperform the market, CICC analysts including Hou Zhenhai wrote in a note today. Monetary policies will continue to be loose in 2011, governments at the central and local levels are reluctant to slow investment at the start to the year and U.S. economic growth may exceed estimates, according to the report.
The Chinese New Year holiday period is from Feb. 2-8.
The Shanghai Composite Index, the worst performer among major Asian benchmarks this year, has fallen 7.7 percent since reaching an almost seven-month high on Nov. 8, on concern that monetary tightening will curb economic growth. The gauge has lost 12 percent this year. For the latest updates PRESS CTR + D or visit Stock Market news Today
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