Chi­nese stocks ex­pe­ri­ence slight gains

China Daily (Hong Kong) - - BUSINESS | MARKETS - By BLOOMBERG

Chi­nese main­land stocks erased de­clines in af­ter­noon trad­ing to scratch out a gain for the day, with PetroChina Co lead­ing the re­bound as oil prices held near a 17-month high.

The Shang­hai Com­pos­ite In­dex rose 0.1 per­cent to close at 3,155.04, after slid­ing as much as 1.1 per­cent. PetroChina added 1.9 per­cent, while China Pe­tro­leum & Chem­i­cal Corp climbed 0.9 per­cent. China’s in­dus­trial out­put grew 6.2 per­cent in Novem­ber from a year ear­lier, in line with an­a­lysts’ ex­pec­ta­tions, while re­tail sales topped es­ti­mates. The Shen­zhen Com­pos­ite In­dex added 0.3 per­cent fol­low­ing Mon­day’s 4.9 per­cent tum­ble.

Con­cern about higher money mar­ket rates and reg­u­la­tory moves to curb lever­aged eq­uity pur­chases has dogged the na­tion’s fi­nan­cial mar­kets this week. Stocks, bonds and the cur­rency have also come un­der pressure be­fore this week’s ex­pected US in­ter­est-rate hike.

“The fig­ures are good but mar­ket sen­ti­ment re­mains cau­tious after a big drop yes­ter­day,” said Li­nus Yip, a Hong Kong-based strate­gist at First Shang­hai Se­cu­ri­ties Ltd. “For the past two months peo­ple were quite ex­cited that in­sur­ers’ money was help­ing to push up the mar­ket, but they did it too dras­ti­cally.”

Re­tail sales ad­vanced 10.8 per­cent last month, while fixed-as­set in­vest­ment in­creased 8.3 per­cent in the first 11 months of the year. With the na­tion’s ex­pan­sion on pace to land in the mid­dle of the govern­ment’s 6.5-7 per­cent full-year ob­jec­tive, at­ten­tion is shift­ing to curb­ing ex­cess cor­po­rate bor­row­ing and in­dus­trial ca­pac­ity and rein­ing in surg­ing prop­erty prices.

In­sur­ers should act as providers of long-term funds to boost the real econ­omy, in­stead of as short-term spec­u­la­tors, China In­sur­ance Reg­u­la­tory Com­mis- sion Chair­man Xiang Junbo said at a meet­ing on Tues­day. Of­fi­cials have moved to rein in fi­nan­cial risks associated with a surge in deal­mak­ing by in­sur­ers, after the na­tion’s top se­cu­ri­ties of­fi­cial likened lever­aged stock buy­ers to “rob­bers”.

The Hang Seng China En­ter­prises In­dex added 0.2 per­cent while Hong Kong’s bench­mark Hang Seng In­dex rose 0.1 per­cent. The city’s fund­ing costs surged for an 11th day on Tues­day to a 2009 high, mak­ing it more ex­pen­sive to bor­row to buy stocks. With the squeeze start­ing to spill over into other mar­kets, Aus­tralia & New Zealand Bank­ing Group Ltd’s Ray­mond Ye­ung says it’s sig­nal­ing con­cern about a cash ex­o­dus.

the gain in the bench­mark Shang­hai Com­pos­ite In­dex

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