Energy boost helps index end at over 1%

By Ding Yining  |   2008-8-7  |     NEWSPAPER EDITION

SHANGHAI stocks yesterday climbed over 1 percent, led by energy-related companies after crude oil traded at US$119 a barrel, the lowest since early May.

The benchmark Shanghai Composite Index added 28.62 points, or 1.06 percent, to close at 2,719.37. Gainers outnumbered losers 494 to 338 and 75 remained unchanged. Turnover fell to 41.13 billion yuan (US$6 billion) from 42.51 billion yuan on Tuesday.

The continued decrease in crude oil prices boosted Sinopec and PetroChina. Sinopec, the country's biggest oil refiner, jumped 3.21 percent to 11.58 yuan and PetroChina rose 1.29 percent to end at 14.87 yuan.

Major research institutes predicted China's consumer price index would fall below 7 percent in July and may reach 6.5 percent, according to a report by China Securities Journal.

''The rebound is within our expectations, yet the shrinking turnover suggests a cautious attitude among most investors,'' said Huiyang Investment in a research note. ''Generally speaking, we believe the index will further rebound in the near future.''

''The rise in the index was mainly due to surrounding markets but technically speaking it is very likely to drop again, so we are afraid the market will face more challenges amid an unfavorable economic situation,'' said Lin Weiwen, an analyst with Hualin Securities.

Ping An Insurance (Group) Co, China's second-largest insurer, advanced 3.55 percent to 45.76 yuan while China Life Insurance Co Ltd rallied 3.94 percent to close at 26.35 yuan. Citic Securities gained 2.65 percent to 22.85 yuan.

China Construction Bank gained 2.75 percent to 5.98 yuan. The Industrial and Commercial Bank of China, the nation's biggest lender, rose 1.58 percent to 5.13 yuan after getting approval from the United States Federal Reserve on Tuesday to open its first US branch in New York.