BackChina stocks meander as rare-earth shares gain, oil firms drop
The Shanghai Composite Index rose 0.1%, after declining the most in three weeks Monday
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Hong Kong: Chinese stocks eked out gains as a rally by rare-earth producers countered falling energy shares.
The Shanghai Composite Index rose 0.1%, after declining the most in three weeks Monday. Xiamen Tungsten Co. and China Northern Rare Earth Group High-Tech Co. surged more than 4%, while Yantai Jereh Oilfield Services Group Co. slid as crude erased a gain. The volume of shares traded on the gauge was 25% below the 30-day average.
The March rebound in mainland equities has slowed this month, with the benchmark index up just 1.1% this month amid waning turnover as better economic data spur concern the government will refrain from adding stimulus. The Shanghai gauge remains the worst performer globally this year, with a 15% drop. Prudence will feature more prominently in China’s monetary policy than last year, while a certain degree of looseness will be maintained, the Xinhua News Agency said in a commentary on Monday.
“Speculation the authorities will take steps to cut capacity as well as boost buying for state reserves is lifting rare-earth producers," said Shen Zhengyang, strategist at Northeast Securities Co. in Shanghai. “The ‘prudence’ note will have some impact on market sentiment as credit growth has been fueling stock gains and regulators may be concerned about over-leveraging."
The Shanghai Composite traded at 3,035.09 at the noon-time break. The Hang Seng China Enterprises Index climbed 0.7%, with China Communications Construction Co. leading gains. The Hang Seng Index rose 0.6%. Bloomberg
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