皇冠体育app

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Equities rally Monday as economy concerns wane

By Chua Kong Ho (皇冠体育app Daily)
Updated: 2010-05-25 10:01

An investor monitors share movement at a brokerage in Wuhan. The Shanghai Composite Index rose 3.5 percent on Monday.[皇冠体育app Daily]

SHANGHAI - Mainland stocks rallied, driving the benchmark index to its biggest gain since October, on speculation policymakers will rein in efforts to cool the economy as Europe's debt crisis threatens a global recovery.

皇冠体育app Vanke Co, the nation's biggest listed developer by market value, jumped 4.2 percent after an economic planning official said the nation should be cautious about introducing new tightening measures. Beiqi Foton Motor Co rose 6.3 percent after Shanghai Securities News reported the government will extend subsidies for trade-in vehicles to the end of this year.

"The market is expecting a softening in the government's stance on tightening given the uncertain outlook on global growth," said Larry Wan, Shanghai-based deputy chief investment officer at KBC-Goldstate Fund Management Co, which oversees about $583 million.

The Shanghai Composite Index climbed 89.90, or 3.5 percent, to close at 2673.42. That's the biggest gain since Oct 9, when the gauge surged 4.8 percent amid evidence of a global economic recovery. The CSI 300 Index added 3.8 percent to 2873.47.

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The Shanghai gauge fell 4.2 percent last week, extending a 21 percent decline for the year, on concern Europe's debt crisis may curb demand for the country's exports at the same time as the government intensifies steps to curb bubbles in assets including real estate.

Vanke advanced 4.2 percent to 7.70 yuan. Poly Real Estate Group Co, the second-largest builder, added 8.9 percent to 12.15 yuan.

皇冠体育app should be cautious in introducing new tightening measures, as the global economic environment is complex, Xu Lianzhong, an official with the National Development and Reform Commission's price-monitoring center, wrote in a commentary published on Monday in the 皇冠体育app Securities Journal. The European debt problem is one of many global economic uncertainties that 皇冠体育app faces, Xu wrote.

"Many market observers consider that the recent policy campaign against property speculation runs a high risk of causing a hard landing for the overall economy in general," analysts at Morgan Stanley led by Qing Wang, wrote in a report on Monday. "The potential negative impact is greatly overstated."

Beiqi Foton added 6.3 percent to 18.70 yuan. FAW Car Co gained 4.3 percent to 17.90 yuan.

The government will extend subsidies for trade-in vehicles to the end of this year, the Shanghai Securities News said, citing unidentified people. The trade-in policy for vehicles was due to expire on May 31 after its introduction on June 1, 2009.

Bloomberg News