Stabilizing moves give Shanghai market a prod

By Ding Yining  |   2008-12-16  |     NEWSPAPER EDITION

SHANGHAI'S key stock index fluctuated but ended higher yesterday after the State Council's statement last Saturday that the country would seek to stabilize its capital markets to prevent the economy from slowing down.

The benchmark Shanghai Composite Index edged up 0.52 percent, or 10.16 points, to close at 1,964.37. Turnover was 55.2 billion yuan (US$8.58 billion), down from the 73.3 billion yuan of the last trading day. Gainers outnumbered losers 647 to 206 and 54 remained unchanged.

"The market may stay in adjustment with a shrinking turnover in the near future - we think it will be hard for the index to climb above 2,000 points," said a research note by Shenyin & Wanguo Securities.

Cabinet also noted in the statement that it was necessary to set up an alternative stock exchange board to help small start-ups to raise funds. Companies specializing in new technology development were among the gainers. Both Shanghai Fudan Forward Science and Technology Co Ltd and Shanghai Dragon Corp surged the daily cap of 10 percent.

Communication companies and chip makers gained yesterday. Eastern Communications Co Ltd added 3.82 percent to 4.08 yuan. China Unicom, one of the three mobile phone operators in the domestic market, rose 1.25 percent to 5.68 yuan. ZTE Corp, a telecom equipment manufacturer, advanced 3.89 percent to close at 28.03 yuan.

Banks showed mixed results. China Construction Bank dipped 0.24 percent to 4.18 yuan. The Shanghai Development Bank increased 1.08 percent to 14.03 yuan.