Eco-friendly shares win

Eco-friendly shares win
20070607beijing time

Chinese shares closed higher yesterday as investors regained some confidence after the recent slump, with ecology-friendly related stocks leading the gainers.

Analysts, however, said the rise was limited because no positive measures came out yesterday and the near-term trend will largely depend on what policies may be unveiled.

The benchmark Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B chips, edged up 0.24 percent to 3,776.32. The Shenzhen Composite Index, which tracks the mainland's smaller market, closed 1.89 percent higher at 1,086.22.

The two markets has seen an erosion in transaction value since last Wednesday after the central government increased a tax on share transactions.

"We saw many small-caps with poor fundamentals plunge today (Wednesday), indicating the market is getting rational," said Xu Yinhui, an investment director at Guotai Jun'an Securities Co. Such low-value stocks have been widely pursued by speculative investors over recent months.

"A shrinking turnover also means the sentiment is getting cautious," Xu said. "They are just waiting for a clear message from the authority."

The market has been expecting the regulator to issue positive measures soon to restore investor confidence.

Shares of environmental-friendly companies have drawn the interest of funds after China earlier this week unveiled a national plan to combat climate changes, analysts said.

Tianjin Capital Environmental Protection Co jumped to the 10 percent daily cap to 8.84 yuan (US$1.16) and Zhejiang Feida Environmental Science & Technology Co also surged by daily limit to close at 11.8 yuan.

Large caps were mixed, capping the index's advance. Aluminum Corp of China rose 3.18 percent to 22.07 yuan and Ping An Insurance (Group) Co of China added 1.25 percent at 57.7 yuan.

Industrial & Commercial Bank of China shed 0.79 percent to 5.04 yuan and China Petroleum & Chemical Corp lost 1.66 percent to 14.25 yuan.