CHINA / National
Chinese stocks surge to 5-year high
(AP)
Updated: 2006-10-24 16:00
SHANGHAI -- Chinese stocks jumped Tuesday, with the key Shanghai index
closing at a five-year high as funds used to bid for shares in Industrial
& Commercial Bank of China flowed back into the market.
The benchmark Shanghai Composite Index surged 2.6 percent to 1,805.18,
its highest close since September 21, when it ended at 1,807.01. The
Shanghai index fell 1.7 percent on Monday.
A stock investor checks the share index changes at a securities trading
office in Zhengzhou, central China's Henan Province October 24, 2006. The
benchmark Shanghai Composite Index surged 2.6 percent to 1,805.18, its
highest close since September 21, when it ended at 1,807.01. [newsphoto]
The Shenzhen Composite Index jumped 2.1 percent to 447.32.
More than 700 billion yuan (US$88.6 billion) in funds that failed to win
a piece of ICBC's initial public offering were thought to have fueled
Tuesday's rebound.
ICBC, whose shares begin trading Friday in Shanghai and Hong Kong,
expects to raise up to US$22 billion in its IPO, the world's largest
ever.
Analysts said they expected the Shanghai index to remain near 1,800 ahead
of ICBC's Friday debut.
Large capitalized companies advanced, fueled by strong institutional
demand.
China Petroleum & Chemical, Asia's largest refiner by capacity, surged
6.4 percent to 5.99 yuan at the close; China United Telecommunications
spiked 4.4 percent to 2.64 and Air China gained 4.2 percent to 3.72.
All of the three were among the most active stocks on the mainland market.
"Institutions want to create a positive market environment for ICBC's
listing on Friday, because many of them hold large amounts of ICBC's IPO
shares," said Zhou Lin, an analyst at Huatai Securities.
In currency dealings, the yuan fell against the dollar after the US
currency gained against other major currencies.
On the over-the-counter market the dollar was at 7.9054 around 0715 GMT,
up from Monday's close of 7.8991.
The dollar was at 7.9050 on the automatic price matching system. It
closed Monday at 7.8980.
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