China shares end 1.06% higher on lower oil prices

(Xinhua)
Updated: 2008-08-06 19:23

BEIJING - Chinese shares gained 1.06 percent on Wednesday on softening crude oil prices, snapping the downward trend for the previous two trading days.

Overnight gains on Wall Street driven by easing worries about higher US interest rates also contributed to the rebound in the domestic market, said Bohai Investment analyst Qin Hong in Tianjin.

The benchmark Shanghai Composite Index rose 1.06 percent, or 28.62points to end at 2,719.37 points. The Shenzhen Component Index closed at 9,047.14 points, down 33.08 points, or 0.36 percent.

Aggregate turnover on the two bourses shrank to 63.53 billion yuan (US$9.56 billion) from 66.81 billion yuan the previous trading day.

Oil refiners and airlines rose across the board as world crude prices dropped more than US$2 overnight to nearly US$118.

PetroChina, the country's largest oil producer, rose 1.29 percent to 14.87 yuan, while Sinopec, Asia's top refiner, jumped 3.21 percent to 11.58 yuan.

Shares of all three leading domestic airlines took off with the lower oil prices. Air China was up 1.64 percent to 9.92 yuan, while China Southern increased 1.7 percent to 7.77 yuan. China Eastern advanced 0.89 percent to 7.92 yuan.

Financial shares edged up as the People's Bank of China, the country's central bank, approved the loan quota increase for local commercial lenders by as much as 10 percent. This was to help small- and medium-sized enterprises cope with financing difficulties.

Bank of China rose 1.27 percent to 4 yuan, while Bank of Communications gained 3.41 percent to 8.19 yuan. China Construction Bank was up 2.75 percent to 5.98 yuan.

On Tuesday, the US Federal Reserve Board approved the Industrial and Commercial Bank of China's application to set up a New York branch, helping the lender's shares rise 1.58 percent to 5.13 yuan.

Hotel and tourism industry stocks continued to rise with the opening of the 2008 Olympic Games just two days away. Shares of Beijing Jingxi Tourism Development Co. added 8.94 percent to 25.09 yuan, while China United Travel Co. gained 5.52 percent to 6.69 yuan.

In contrast, real estate shares continued to fall following China Vanke's negative forecast for its performance in the second half of this year. The group's shares lost 1.76 percent to 7.8 yuan, while Poly Real Estate Co. fell 0.21 percent to 14.48 yuan.