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| Market moves north despite sudden rate hike |
SHANGHAI, Aug. 22 -- SHANGHAI stocks inched up today backed by strong growth in the metal sector despite yesterday's surprise interest rate increase.
The Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B shares, inched up 0.5 percent, or 24.87 points, to close at 4,980.08.
The Shenzhen Composite Index, which covers the smaller mainland stock market, rose 1.68 percent, or 23.09 points, to 1,398.37.
Aluminum Corp of China, the nation's biggest producer of the metal, rose 10 percent to 43.66 yuan (US$5.74) per share while Yunnan Copper, the country's third-biggest copper maker, surged the 10-percent daily ceiling for the second straight day to close at 64.45 yuan.
Aluminum Corp of China announced on Monday that it has reached an agreement with the Yunnan government to buy a 49-percent stake in Yunnan Copper.
Zhongjin Gold Corporation also rose 10 percent to 91.30 yuan and Inner Mongolia-based Baotou Aluminum Co jumped 9.99 percent to 55.81 yuan.
The banking sector received a mixed message from investors today as the reduced gap between the lending rate and the interest rate paid on deposits may curb banks' earnings.
China's central bank announced yesterday it would raise interest rates for the fourth time this year starting today to rein in the highest inflation rate in more than a decade.
The benchmark lending rate rose 0.18 percentage points to 7.02 percent, while the deposit rate climbed 0.27 percentage points to 3.6 percent starting today, the People's Bank of China said yesterday on its Website.
Industrial and Commercial Bank of China lost 1.7 percent to 6.92 yuan and Bank of China dropped 1.62 percent to 6.09 yuan.
Shanghai Pudong Development Bank jumped 5.31 percent to 49.39 yuan after the lender announced it posted an 84 percent gain in second-quarter profits because of increased loans and fees from financial services, such as distributing mutual funds.
China Vanke Co, the nation's largest listed developer, rose 3.25 percent to 34 yuan on speculation that property demand will withstand the nation's fourth interest-rate increase since March.
Vanke plans to raise as much as 10 billion yuan selling new shares to fund residential projects as housing prices surge, Bloomberg News reported today.
Investors are being offered 317.2 million shares at 31.53 yuan each on August 24, Shenzhen-based Vanke said in a statement to the city's stock exchange today.
Citic Securities Co will manage the sale, which represents 20 percent of the company's existing capital. Citic Securities shares rose 1.53 percent today to close at 89.65 yuan.
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