Blue chips push higher, growth stocks drop in mixed market day

Chinese mainland stocks were mixed on Thursday, with the blue- chip CSI 300 Index rising for the fourth straight day as raw material shares powered ahead on the back of soaring metal prices.

The benchmark Shanghai Composite Index edged up 0.02 percent to close at 3,241.74 points, while the Shenzhen Component Index finished 0.06 percent lower at 10,967.47 points.

The CSI 300 index of the 300 biggest companies traded in Shanghai and Shenzhen went up 0.40 percent to close at 3,488.74 points.

The ChiNext Index, which tracks China’s NASDAQ- style board for high- tech and emerging start- ups, shed 0.88 percent to 2,146.63 points.

China’s blue- chips have outperformed growth stocks over the past month, reflecting investors’ renewed inclination toward cyclical sectors such as financials and commodities, amid signs that the economy is finding its feet. “There’s obvious rotation into cyclical plays, out of growth stocks,” said Chang Chengwei, analyst at Hengtai Futures Co.

The recent strength in commodity prices – which in turn lit a fire under raw material stocks – is the result of the government over- doing its efforts to reduce capacity, resulting in supply shortages, Chang said.

Shares in China’s major base metal producers rose as futures prices of copper, zinc and nickel jumped, maintaining strong upward momentum.

Although China’s yuan continued to face selling pressure, inching toward 7 yuan per dollar, there’s no signs of panic in China’s stock market. Investors appeared to be interpreting the yuan’s weakness as potentially pushing up prices of imported goods, and driving up inflation.