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Coal, oil and US jobs data boost the markets

Updated: 2011-05-10 11:05

By Zhang Shidong (China Daily)

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SHANGHAI - Stocks on the Chinese mainland rose the most in almost a week on Monday.

The advance came after commodity prices rose and higher-than-forecast growth in the US job numbers bolstered confidence in the global recovery.

The coal producer China Shenhua Energy Co led gains for energy companies after oil rebounded from the biggest weekly decline since 2008.

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CSR Corp and China CNR Corp jumped at least 5 percent after China Central Television reported the government's railway investment plans won't change much this year. A gauge of consumer staples producers fell the most among industry groups amid concern over price controls.

"The economic growth prospects of China and the global economy aren't gloomy," said Wei Wei, an analyst at West China Securities Co in Shanghai. "With valuations at a bottom, stocks should get a boost from good data."

The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, added 0.3 percent, to 2872.46 at the 3 pm close, the most since May 3.

The stocks measure slid 1.6 percent last week. The CSI 300 Index gained 0.3 percent to 3129.76 on Monday.

The Shanghai Composite has declined 6.1 percent from a five-month high registered on April 18, amid concern the government will attempt to curb inflation by adding to 10 increases in the reserve-ratio requirements for lenders and four rises in interest rates since early last year. The losses pared the gauge's advance this year to 2.3 percent.

The Shanghai gauge trades at 13.3 times estimated earnings this year, lower than the average of 20 times for the multiple over the past four years, according to weekly data compiled by Bloomberg.

Economic data scheduled for Tuesday will show exports probably rose 29.5 percent in April, slowing from growth of 35.8 percent the previous month, according to a survey by Bloomberg News.

The nation's April inflation rate may have been about 5 percent, China National Radio reported, citing market expectations. That's below the forecast for a gain of 5.2 percent last month, based on a survey of economists by Bloomberg News.

The inflation figures are scheduled for release on May 11. China International Capital Corp forecast April inflation of 5.4 percent, unchanged from the previous month, when it reached three-year highs.

"It appears inflation continues to rise amid a looming slowdown, potentially one of the worst scenarios for Chinese stock markets," said Hao Hong, a global equity strategist, at CICC, in a report on Monday. "Though this is not stagflation just yet, investors should stay vigilant."

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