China Shenhua Energy Co climbed 2.7 percent to 30.14 yuan ($4.66) on Thursday. Oil and coal companies led gains for commodity producers on higher raw-material prices. [Photo / China Daily]
Shanghai - Stocks on the Chinese mainland rose, paring the benchmark index's first quarterly loss in a year, after Greece passed austerity measures.PetroChina Co and China Shenhua Energy Co led gains for commodity producers on higher raw-material prices. CITIC Securities Co, China's biggest listed brokerage, gained 1.6 percent on expectations a market rally will boost revenue.
"Investors are gaining confidence as the measures passed by Greece have reduced the odds that an upheaval will take place in global financial markets," said Dai Ming, a fund manager at Shanghai Kingsun Investment Management & Consulting Co. "On the domestic front, the market expectation is that inflation will be peaking soon."
The Shanghai Composite Index, which tracks the bigger of the Chinese mainland's stock exchanges, rose 33.59 points to 2762.08 at the end of trading, the highest close since May 24. It fell 1.1 percent on Wednesday, the most since June 16. Hong Kong's stock market will be closed on Friday for a holiday.
The Shanghai gauge has slumped 5.7 percent this quarter, the first drop since the three months ended June last year, on concern that government measures to cool inflation will slow the economy. Since the start of last year, the central bank has raised reserve requirements 12 times and rates four times. The index is valued at 12.8 times estimated earnings, compared with the average of 18.9 times over the past five years, according to data compiled by Bloomberg.
A measure of 23 energy stocks advanced 1.9 percent, the most among the CSI 300's industry groups. PetroChina gained 1 percent to 10.89 yuan ($1.68) and Shenhua climbed 2.7 percent to 30.14 yuan. Yanzhou Coal Mining Co advanced 3.1 percent to 35.30 yuan.
Crude oil for August delivery gained for a third day, extending a 4.6 percent advance over the previous two days and rising as much as 0.7 percent to $95.44 a barrel in New York on Thursday after the US government said inventories fell almost four times more than analyst projections.
Banks rebounded after Caijing Magazine cited Shanghai municipality spokesman Chen Qiwei as saying a Hong Kong Economic Journal article claiming a financing vehicle of the Shanghai municipality may not be able to repay loans was "seriously untrue".
China Merchants Bank Co added 0.8 percent to 13.02 yuan after falling 1.8 percent on Wednesday. Huaxia Bank Co, partly owned by Deutsche Bank AG, rose 1 percent to 10.87 yuan.
The Shanghai Composite has risen on seven of the last eight trading days, bolstering the earnings outlook for brokerages.
CITIC Securities gained 1.6 percent to 13.08 yuan. Haitong Securities Co added 2.5 percent to 9.02 yuan. China Merchants Securities Co rose 2.1 percent to 18.38 yuan.
The Shanghai index may rebound to as high as 3,500 in the second half, bolstered by debt issues from local governments to fund affordable housing and water conservation projects, according to CITIC.
Profits for Chinese listed companies may rise 18.6 percent this year, equivalent to a price-to-earnings ratio of 14 times, analysts wrote in a report on Thursday.
China's inflation may accelerate to 6.5 percent this month as pork prices climb, according to Shenyin & Wanguo Securities Co.
The central bank may raise interest rates around the time economic data for June is released, according to Li Huiyong and Meng Xiangjuan, analysts at the brokerage, in a report on Thursday.
The figures are scheduled to be released on July 15. The inflation rate was 5.5 percent last month, the highest since 2008 and exceeding the government's annual target of 4 percent.
A gauge of consumer staples stocks has advanced 2.8 percent this quarter, the best performer among the CSI 300's 10 industry groups, as investors sought havens amid concerns that the economy will slow. A measure of industrial stocks has slumped 7.8 percent over the same period.
China will also release its June Purchasing Managers' Index on Friday. Manufacturing expansion may slow to 51.5 from 52 a month earlier, according to a Bloomberg survey.
Bloomberg News
