| Mainland stocks advance, erasing losses |
SHANGHAI, June 12 -- MAINLAND'S stocks rose for a sixth straight day, erasing earlier losses, as investors shrugged off concern that the fastest inflation in two years will trigger further increases in interest rates.
Jiangxi Copper Co jumped as concern about possible strikes at mines in Chile, the world's largest source of the metal, and Mexico caused prices of the metal to surge, Bloomberg reported.
The Shanghai Composite Index, which tracks the bigger of mainland's stock exchanges, rose 1.91 percent to 4,072.138. Shenzhen Component Index gained 2.97 percent to 13,579.719.
"The market is still being driven by liquidity,'' said Lu Yizhen, who oversees the equivalent of US$375 million at Citic-Prudential Fund Management Co in Shanghai. "The gains in consumer prices were within our expectations.''
Inflation accelerated to 3.4 percent in May, exceeding the central bank's 3 percent ceiling, according to a government report released today. Economists predicted a 3.3 percent rate, a Bloomberg News survey showed.
The pickup in inflation further erodes the purchasing power of money put on deposit at China's banks. Savings rates can't exceed the central bank's benchmark one-year deposit rate, which is currently 3.06 percent.
China Yangtze Power Co, owner of the world's biggest hydropower project, rose 0.78 yuan, or 5.9 percent, to 13.97 yuan.
Account Openings
Investors set up 219,598 securities accounts for investing in mainland shares and mutual funds on June 8, bringing the tally to 103.3 million, according to the latest figures from the China Securities Depository & Clearing Corp.
Account openings, which averaged about 300,000 a day this quarter, have cooled only slightly since the government tripled the tax on securities trading on May 30, triggering a rout that caused the CSI 300 to plunge more than 20 percent.
Jiangxi Copper Co, China's second-biggest producer of the metal, rose 2.40 yuan, or 8.3 percent, to 31.32 yuan. Anhui Tongdu Copper Stock Co, the listed arm of China's biggest producer of the metal, gained 2.05 yuan, or the daily cap of 10 percent, to 22.58 yuan.
Copper futures for August delivery on the Shanghai Futures Exchange rose as much as 1,230 yuan, or 1.9 percent, to 64,650 yuan (US$8,455) a ton. The July futures contract yesterday rose 3 percent to US$3.356 a pound in New York, the biggest one-day gain since May 25.
Mining workers have increased salary demands after copper prices jumped 16 percent this year, boosting profit for companies including Chile's Codelco, the world's largest copper producer. Contract workers at Codelco are preparing for a strike next week, a labor spokesman in Santiago said yesterday.
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