Barefoot Investor: China Stocks Rise for First Time in Week as Profits Withstand Policy Steps

China’s stocks fell, extending the benchmark index’s losses to a fifth day, on concern the government will further tighten monetary policy even as the global economic slowdown threatens to curb Chinese exports.

Industrial & Commercial Bank of China (601398) Ltd. and China Vanke Co., the nation’s biggest lender and property developer respectively, led declines for financial companies after China’s money-market rate climbed to its highest level in almost three weeks and a Chinese state economist said it’s too early to loosen monetary policies. Yanzhou Coal Mining Co. jumped by the most in more than seven weeks after first-half profit increased.

“Investors have become sensitive to negative news and numb to good news,” said Tu Jun, a strategist at Shanghai Securities Co. “The market is still bearish amid tight liquidity and concern over the global economic slowdown has added to the bearish sentiment.”

The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, lost 6.65 points, or 0.3 percent to 2,527.71 as of 11:19 a.m. local time. The gauge dropped 2.3 percent last week, capping the longest streak of weekly losses since December 2010. The CSI 300 Index (SHSZ300) dropped 0.5 percent to 2,794.98 today.

The Shanghai gauge has declined 10 percent this year as the central bank raised interest rates five times and ordered lenders to set aside more cash as deposit reserves 12 times since the start of 2010 to contain inflation that quickened to the fastest pace in three years last month. According to data compiled by Bloomberg, the measure is valued at 11.6 times estimated earnings, the lowest since Bloomberg began to track the data in 2006. (Bloomberg)


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