Lower oil price boosts Chinese benchmark

SHANGHAI - China's benchmark stock index rose above the 3,000 level for the first time in four months on Wednesday.

The rise came as lower oil prices spurred an advance for industrial companies.

China CSSC Holdings Ltd climbed to a 19-month high. PetroChina Co and the coal producer China Shenhua Energy Co paced losses by energy companies as crude oil fell for a second day. Poly Real Estate Group Co slid 0.98 percent, leading declines among developers, on concern the government will take further steps to cool property speculation.

"The retreat in oil prices is a relief, but that's only temporary," said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co, which oversees $285 million. "Inflation isn't going to abate soon and is still a major threat to the economy this year."

The Shanghai Composite Index gained for a fourth day, adding 0.07 percent to 3002.15 at the 3 pm close, the first close above 3,000 since Nov 15. The CSI 300 Index rose less than 0.04 percent to 3338.86.

A gauge tracking industrial companies climbed 0.8 percent on the CSI 300. China CSSC rallied 6.03 percent to 84.39 yuan ($12.84), its highest close since August 2009. China First Heavy Industries Co rose 3.41 percent to 6.98 yuan.

Offshore Oil Engineering Co surged 6.58 percent to 9.39 yuan. PetroChina slipped 0.66 percent to 12 yuan. China Coal Energy Co slid 0.86 percent to 11.50 yuan.

A gauge of property stocks on the Shanghai Composite lost 0.6 percent. Poly Real Estate slid 0.98 percent to 13.19 yuan. Gemdale Corp lost 0.74 percent to 6.72 yuan.

China may introduce a new round of control measures on the real estate market if property prices do not stabilize, China Securities Journal reported on Wednesday.

Changjiang Securities Co jumped by the 10 percent daily limit to 13.20 yuan as it resumed trading after a two-day suspension. The brokerage said it raised 2.5 billion yuan from selling additional shares.

Bloomberg News

(China Daily 03/10/2011 page16)