Stocks erase losses on pub­lic works plan

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

Global stocks were mixed on a day when many mar­kets were closed for a hol­i­day. Ja­panese shares fell as the yen gained against the dol­lar, while Chi­nese eq­ui­ties re­cov­ered from ear­lier losses.

The Topix in­dex slipped in Tokyo on trad­ing vol­umes around 40 per­cent below the 30-day av­er­age. The Shang­hai Com­pos­ite In­dex erased a drop of as much as 1.3 per­cent, with con­struc­tion stocks strength­en­ing af­ter the gov­ern­ment said it aims to in­vest 1.8 tril­lion yuan ($260 bil­lion) in high­ways and water­ways next year.

In­dia’s Sen­sex in­dex re­sumed its de­cline, fall­ing to the low­est in more than a month. The yen ad­vanced for a fourth straight day and the rou­ble strength­ened 1 per­cent.

A volatile year for fi­nan­cial mar­kets is draw­ing to a close as in­vestors as­sess the postUS elec­tion rally that’s added tril­lions to the value of global eq­ui­ties and lifted the dol­lar to a mul­ti­year high.

US eq­ui­ties are trad­ing near a record and crude oil has climbed to a 17-month peak as traders have en­dured shocks from the Brexit vote in the UK to the US pres­i­den­tial elec­tion.

“There are tech­ni­cal in­di­ca­tors flash­ing cer­tain signs, but there aren’t any events left this year, and I see 2016 end­ing with lit­tle dis­tur­bance, and small moves,” said Seiji Iwama, a fund man­ager with Daiwa SB In­vest­ments Ltd in Tokyo.

Na­tions from Aus­tralia to the UK and US ob­served hol­i­days on Mon­day, while mar­kets in Dubai, Rus­sia and per­cent Brazil are among those open.

China stocks rose in after­noon trad­ing to erase ear­lier losses as in­vestors bet on State-backed builders af­ter the gov­ern­ment an­nounced a spend­ing plan for pub­lic works that in­clude 5,000 kilo­me­ters of new high­way next year.

The Shang­hai Com­pos­ite In­dex rose 0.4 per­cent to 3,122.57 at the close, re­vers­ing a loss of as much as 1.3 per­cent. China Com­mu­ni­ca­tions Con­struc­tion Co surged 7.9 per­cent for its big­gest gain since Nov 3. Other large Sta­te­owned builders of hous­ing, ships and nu­clear plants also jumped. The Shen­zhen Com­pos­ite In­dex erased an ear­lier loss to add 0.4 per­cent.

China will spend 1.8 tril­lion yuan ($259 bil­lion yuan) on high­way and wa­ter­way projects next year, the Min­istry of Trans­port said in a state­ment on its web­site. Shang­hai’s bench­mark in­dex has got­ten a boost in the last quar­ter of 2016 from China’s “old econ­omy”, namely in­dus­trial, in­fra­struc­ture and State-backed firms. A gauge of main­land in­dus­trial com­pa­nies has risen 11 per­cent in the fourth quar­ter, out­pac­ing the 3.9 per­cent gain by the Shang­hai Com­pos­ite In­dex.

“The 1.8 tril­lion yuan plan is huge, and the ac­tual in­vest­ments could be a bit more,” said He Min­liang, a Taipeibased an­a­lyst at Cap­i­tal Se­cu­ri­ties Corp.

the gain in the bench­mark Shang­hai Com­pos­ite In­dex on Mon­day

AN XIN / FOR CHINA DAILY

An in­vestor checks share prices at a bro­ker­age in Fuyang, An­hui prov­ince.

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