With nearly 200 companies set to file quarterly earnings reports, analysts are cautiously optimistic that China's Shanghai Composite Index will add modestly to recent gains when the market opens for business on Tuesday. China shares were sharply higher on Monday after a poor showing in the morning that followed a 3 percent market decline last week. For the day, the index added 158.37 points or 2.83 percent to close at 5,747.99. Turnover was the lowest in two months at 82.11 billion yuan. Banks led the advance as China Construction Bank rose 4.2 percent, while Bank of Communications added 3.4 percent and Industrial and Commercial Bank of China gained 7.4 percent. The market is expecting a surge of capital following the completion of PetroChina's huge initial public offering, which has locked up a record 3.3 trillion yuan in subscriptions. The company's shares are set to begin trade on November 5. The market gets modestly positive cues from Wall Street, which finished marginally higher on Monday as investors took hope in a possible interest rate reduction and largely ignored another record high for oil prices. The U.S. Federal Reserve will meet on Tuesday and Wednesday, when it's expected to cut interest rates by a quarter of a percentage point - spurring the markets and further weakening the dollar. Subduing the markets gains was a record price of oil, which closed above the $93 a barrel mark for the first time. The Dow gained 68.77 points, or 0.50 percent, to end the session at 13,875.47. The Nasdaq rose 10.32 points, or 0.37 percent, to finish at 2,814.51, while the S&P 500 rose 5.63 points, to end the day at 1,540.90. In economic news, foreign trade in China is seen to exceed US$2.1 trillion in 2007 for a 20 percent rise on year, according to the official Xinhua news agency reported, citing a report issued by the Ministry of Commerce. Exports are projected at US$1.2 trillion, while imports are forecast at US$950 billion for a trade surplus of US$250 billion, the report said. Through the first three quarters of 2007, Chinese exports climbed 27.1 percent on year to US$878.2 billion, while imports rose 19.1 percent to US$692.6 billion. According to the report, China's trade volume is seen topping US$2.4 trillion in 2008, rising 15 percent on year. Also, European steel firms have filed a complaint with the European Commission, seeking duties to be placed on goods imported from China, Taiwan and South Korea. The European Confederation of Iron and Steel Industries says the EU market has been inundated by imports, charging that prices have been undercut by as much as 25 percent. Steel from China to the EU is expected to double in 2007 on year, to 10 million tons. In corporate news, the Aluminum Corp. of China Ltd. (Chalco) intends to buy out the remaining 49 percent of Hewan Power Generation Co. that it doesn't already own from parent company Aluminum Corp. of China. Hewan Capital is worth 816.3 million yuan. Also, Staples Inc. has entered into a joint venture with United Parcel Service Inc. to launch a new co-branded store in China, combining office supplies and document processing services with packaging and international shipping services. Called Staples UPS Express, the first two store locations opened Monday in Beijing. Two additional locations are planned to open in Shanghai by the end of 2007.
October 29, 2007 9:18 PM