Chinese shares up on stronger bluechips on Tuesday

Major Chinese stock market indices rose on Tuesday as stronger bluechips boosted market confidence.

The benchmark Composite Stock Index of the Shanghai Stock Exchange, which covers yuan-denominated A shares and foreign-currency B shares, closed at 1,837.99 points, up 28.34 points, or 1.57 percent.

The Component Stock Index of the Shenzhen Stock Exchange closed at 4,621.98 points, up 1.35 percent.

Total transaction volume of the major boards of both Shanghai and Shenzhen markets stood at 39.3 billion yuan (five billion U.S. dollars).

Chinese petrochemical giant Sinopec was up 6.28 percent to close at 6.43 yuan, an increase of 0.38 yuan.

The big rise followed its better-than-expected quarterly report that its major business increased by 25.48 percent and net profits jumped 55.78 percent.

China Petroleum and Chemical Corporation (Sinopec) on Tuesday announced a year-on-year net profit growth of 55.78 percent to reach 13.1 billion yuan in the third quarter. Its income from principal operations was 273.2 billion yuan (34.15 billion U.S. dollars) in the third quarter, up 25.48 percent over the same period last year.

Other major blue chip companies, such as the country's two biggest commercial banks, the Industrial and Commercial Bank of China and the Bank of China, Baosteel, and real estate giant Wanke, also went up after recent falls.

China Southern Airlines and Air China skyrocketed by their daily maximum of 10 percent, boosted by the rising exchange rate of the Chinese currency against the U.S. dollar, which means lower production costs for airlines that rely on imported oil.

The central parity of the yuan against the U.S. dollar stood at 7.8792 yuan per U.S. dollar, a third consecutive record high.

Gu Jie, an analyst with Hualin Securities Co., said the rising bluechips boosted the major indices on the markets, which were expected to remain bullish.

But analysts with Shanghai-based Shenyin and Wanguo Securities Co. were cautious in the short term, saying the major indices had to consolidate as the Shanghai index remained above 1,800 points, the highest in five years.

The Shanghai Composite Stock Index hit the 1,800 point-level on Sept. 25, 2001.

The market began to rise in early June last year, when the major index dropped to 998 points. Reforms launched last May and dramatic rises in the international commodity markets helped boost the stock markets.

Source: Xinhua