China shares up on fund talk

China Daily (USA) - - BUSINESS - By BLOOMBERG

Chi­nese shares rose in af­ter­noon trad­ing, with con­sumer and in­dus­trial stocks lead­ing the ad­vance, amid spec­u­la­tion that State-run funds in­ter­vened in both the eq­uity and cur­rency mar­kets.

The Shang­hai Com­pos­ite In­dex climbed 0.6 per­cent, the most in three weeks, after de­clin­ing to­ward the 3,000 mark ear­lier. Great Wall Mo­tor Co added 1.9 per­cent on a surge in sales, while CSSC Off­shore & Marine En­gi­neer­ing Group Co ad­vanced 4 per­cent. A gauge of main­land stocks traded in Hong Kong headed for the high­est close since De­cem­ber, while the ChiNext mea­sure of smaller com­pa­nies rose to a one-month high.

The Shang­hai bench­mark has moved less than 1 per­cent on a daily clos­ing ba­sis in the past three weeks, with yuan de­clines and lack­lus­ter eco­nomic data hurt­ing sen­ti­ment.

China is sched­uled to re­lease a set of Au­gust eco­nomic data this week, with for­eign trade due on Thurs­day and in­fla­tion the fol­low­ing day.

Exports prob­a­bly fell 4 per­cent from a year ear­lier while in­fla­tion slowed to 1.7 per­cent, ac­cord­ing to me­dian es­ti­mates sur­veys.

“The gov­ern­ment seems to want to keep the mar­ket above the 3,000 level,” said WeiWei, an an­a­lyst at Huaxi Se­cu­ri­ties Co in Shang­hai. “Ev­ery time we see the in­dex ap­proach 3,000, there’s al­ways some sus­pected buy­ing. Given the econ­omy isn’t likely to be in good shape in the third and fourth quar­ter, the na­tional team is an im­por­tant force to sta­bi­lize the mar­ket.”

The Shang­hai Com­pos­ite closed at 3,090.71, after de­clin­ing 0.6 per­cent ear­lier. The Hang Seng In­dex climbed 0.5 per­cent, with its 14-day rel­a­tive strength gauge ris­ing to 76.6, beyond the 70 level that sug­gests to some traders that a rally is over­done. in Bloomberg

the gain in the bench­mark Shang­hai Com­pos­ite In­dex on Tues­day

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