Olympics, agro shares drive China market further up

Chinese shares Wednesday maintained the momentum that started the previous day, to gain substantially with heavyweights leading the way.

Olympic and agriculture-related stocks stole the limelight.

The benchmark Shanghai Composite Index rose 3.64 percent, or 101.99 points, to 2,905.01 points. The Shenzhen Component Index gained 4.79 percent, or 456.53 points, to 9,982.18 points. The Hushen 300 Index, which reflects both exchanges, closed at 2,969.54, up 117.62 points, or 4.12 percent.

Combined turnover on the two bourses increased sharply to 103.58 billion yuan (14.8 billion U.S. dollars) on Wednesday, up from 75.61 billion yuan on the previous trading day.

Olympics-related shares remained strong as the event approaches.

Among them, Beijing Tourism, Shunxin Agriculture, Baosheng Holding and CITIC Guo'an rose by the 10-percent daily limit to 16.46 yuan, 14.49 yuan, 14.82 yuan and 12.63 yuan respectively.

Financial Avenue went up 8.50 percent to 8.30 yuan, and Beijing Municipal Construction up 8.51 percent to 12.37 yuan.

The agriculture-related stocks also surged on expectations of strong earnings, largely down to mounting food prices. More than 20 of them rose by the 10-percent daily limit, including Jinjian Rice (closed at 8.20 yuan), Xinnong Development (8.31 yuan), Fengle Seed (11.28 yuan) and Yuan Longping High-Tech (29.14 yuan).

New Hope gained 8.72 percent to 9.48 yuan, while Zhongmu Holdings jumped 8.84 percent to 15.88 yuan.

Gains outnumbered losses by 844 to 6 in Shanghai and 709 to 3 in Shenzhen, with only nine shares falling at the closing session on the two bourses.

All of the top 20 heavyweights gained. Among them, Daqin Railway went up 5.36 percent to 13.56 yuan, CNOOC up 5.17 to 19.95 yuan, China Life up 4.42 percent to 26.92 yuan, Bank of China up 3.54 percent to 4.39 yuan, China Ping An up 2.64 percent to 50.98 yuan, Sinopec up 2.67 percent to 11.55 yuan, and PetroChina up 2.87 percent to 15.76 yuan.

Analysts with Huiyang Investment said the sharp gains would not sustain without new stimulus from the government. They believed price rises for oil and continued weakness on Wall Street would dampen the market mood.

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