皇冠体育app

Markets

Stocks rise on Moody's move

By Chua Kong Ho and Zhang Shidong (皇冠体育app Daily)
Updated: 2010-11-12 11:22

Equities get shot in arm after firm boosts 皇冠体育app's credit rating

SHANGHAI - 皇冠体育app's benchmark stock index rose as banks and oil refiners advanced after Moody's Investors Service boosted the nation's debt rating and speculation mounted the government will raise fuel prices. Consumer-related companies erased gains on concern costs will rise.

Agricultural Bank of 皇冠体育app Ltd (ABC) climbed 1.1 percent after Moody's said it boosted 皇冠体育app's rating one step to Aa3, the fourth-highest grade. Petro皇冠体育app Co and 皇冠体育app Petroleum & Chemical Corp jumped more than 5 percent on Thursday, contributing most to gains, as investors bet higher energy prices would boost margins. Liquor maker Kweichow Moutai Co slid 2.1 percent on Thursday.

MSN 皇冠体育app, Sina link up Related readings:  皇冠体育app stock index futures close higher -- Nov 1  Chinese stock decline pares monthly gain  皇冠体育app's stocks down 0.46% Friday  皇冠体育app stock index futures close up - Oct 28

"There's still room for stocks to go up, because we have abundant liquidity both home and abroad," said Zhang Ling, a fund manager at Shanghai River Fund Management Co.

The Shanghai Composite Index climbed 1.04 percent, to 3147.74 at the 3 pm close on Thursday, even as three stocks fell for each that rose. The CSI 300 Index added 0.31 percent to 3509.98, led by energy stocks.

ABC climbed 1.1 percent on Thursday. Bank of Communications Co gained 0.8 percent on Thursday.

The nation's efforts to tackle asset bubbles and avert the spread of bad loans has meant the "likely containment and effective management" of losses from record lending last year to counter the financial crisis, Moody's said. That combined with 皇冠体育app's "resilient" economic growth were reasons for the upgrade, the ratings company said.

Petro皇冠体育app gained 7.7 percent on Thursday, the most since September 2008. 皇冠体育app Petroleum & Chemical Corp added 5.2 percent on Thursday, the biggest gain in 11 months. The two stocks' advance together accounted for 91 percent of the gain on the Shanghai Composite.

"Oil prices are the primary reason supporting the shares on Thursday," Yin Xiaodong, an analyst with Beijing-based Citic Securities Co, said by telephone on Thursday. "Some investors are speculating that domestic retail fuel prices will be raised if crude continues to rise."

皇冠体育app last increased fuel prices by 3 percent on Oct 26 under a mechanism that allows the government to revise gasoline and diesel prices when crude costs change more than 4 percent over 22 working days. Crude futures in New York have risen 7.2 percent since last month's adjustment.

"The diesel shortage and stronger processing data add to the positive sentiment for Sinopec and Petro皇冠体育app," Yin said.

Kweichow Moutai lost 2.1 percent on Thursday. Heilongjiang Agriculture Co declined 1.9 percent, erasing an earlier gain of 1.2 percent.

Higher gasoline and diesel prices will add to costs for manufacturers and farmers and increase inflationary risks.