China's Stocks Advance, Paring Index's Biggest Annual Decline Since 2008
2012-1-1 0:00:00Author： adminFont Size：Big Medium Small
SHANGHAI, Dec.30 - China’s stocks (SHCOMP) advanced, trimming the benchmark index’s biggest annual loss since 2008, as increasing U.S. home sales bolstered confidence in the world’s largest economy.
FAW Car Co. (000800), which makes passenger cars in China with Volkswagen AG, climbed 4.7 percent after the company received regulatory approve to buy an affiliate’s stake. Jiangxi Copper Co. and zinc producer Zhuzhou Smelter Group Co. paced gains by commodity producers after copper prices increased. Stocks rose even after manufacturing contracted for a second month.
“We have high inflation, an economic slowdown and very tight money supply this year and that’s a picture of stagflation that is pretty negative for equities,” said Wei Wei, an analyst at West China Securities Co. in Shanghai. “The stock market may find a bottom next year given cheap valuations. But in terms of economic fundamentals, we haven’t seen an end to the slowdown.”
The Shanghai Composite Index climbed 25.86 points, or 1.2 percent, to 2,199.42 at the close, its biggest gain in two weeks. The CSI 300 Index (SHSZ300) rose 1.5 percent to 2,345.74. The Bloomberg China-US 55 Index (CH55BN) the most-traded U.S.-listed Chinese companies, added 0.8 percent yesterday in New York. China’s markets will be shut until Jan. 4 for holidays.
World’s Worst
The Shanghai Composite tumbled 22 percent this year, the most since 2008 and extending last year’s 14 percent plunge, on concern increases in borrowing costs and Europe’s debt crisis will derail economic growth. The index’s 33 percent drop since 2009 makes it the worst performer among the world’s 15 biggest markets.
HSBC Holdings Plc and Markit Economics said a purchasing managers’ index was at 48.7 in December. That compares with a preliminary result of 49 reported on Dec. 15 and a final reading of 47.7 for November. China’s economic growth will slow to 8.5 percent in 2012, the least in 11 years, according to the Organization for Economic Cooperation and Development.
Stock declines have pushed the Shanghai gauge to trade at a record low of 10.6 times estimated earnings, according to weekly
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