By Chao Deng
Stocks in Shanghai rose to their highest level since July 2011
on Tuesday, while the Australian market rebounded on a recovery in
oil prices.
The Shanghai Composite Index rallied late in the day to close up
3.1% at 2,763.54 as investors bought brokerage stocks and banks.
Tuesday's rise was the Shanghai Composite's biggest percentage
point gain since Sept. 9, 2013, when it jumped 3.4%.
Of 19 listed brokerages, 10 hit their 10% daily upside limit.
Analysts expect them to profit as trading volumes and the balance
of lending to investors for margin trading pick up with a new link
to Hong Kong drawing capital from global investors. Leverage ratios
are also expected to rise as Chinese regulators ease controls on
financing channels for brokerages.
Bank stocks also rallied as investors bet on further monetary
easing. Official data Monday showed a worse-than-expected slowdown
in China's manufacturing activity. China Minsheng Banking Corp.
(CMAKY) and Bank of Communications rose by the 10% daily upper
limit to 10.01 yuan and 9.96 yuan, respectively. Bank of China
(BACHY) added 5.3% to 3.56 yuan.
"Institutional investors are in a hurry to increase their
positions in blue-chip stocks, such as financial companies," said
Huang Cendong, an analyst at Sinolink Securities, adding a moderate
consolidation will likely follow.
In Australia, the S&P/ASX 200 rose 1.4% to 5,281.3 after an
overnight rebound in oil prices. Benchmark U.S. oil prices on the
New York Mercantile Exchange(CLF5) surged 4.3% to $69 a barrel, the
largest percentage gain in more than two years in a rally that
snapped four sessions of losses.
BHP Billiton Ltd. (BHP), which fell to a 5 1/2 -year low Monday,
helped drive the market with a gain of 3.9%. Rio Tinto (RIO) added
2.2%, OZ Minerals rose 5.4% and Newcrest Mining (NCMGY) increased
7.7%. The same energy sector stocks knocked 3.6% off Australia's
benchmark in the last two trading sessions, when investors worried
that a sustained drop in oil prices would weigh on the bottom line
of the country's oil producers.
Late in Asia, crude oil was roughly flat at $68.99 a barrel.
The Nikkei Stock Average gained 0.4% to 17,663.22, its third
straight increase, even though Moody's Investors Service downgraded
Japan's credit rating by one-notch late Monday. The market got a
lift from the U.S. dollar(USDJPY) , which rose 0.5% to 118.86
against the Japanese yen.
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