China stocks end higher, strong commodity shares lend support

SHANGHAI, June 29 (Reuters) – China stocks rose on Thursday,
driven by strong gains in raw material shares as a weaker dollar
lifted commodities prices.

Sentiment was also boosted by easing fears of a quarter-end
liquidity crunch in the banking system, as well as a rise in the
yuan, which assuaged concerns about capital outflows.

The blue-chip CSI300 index rose 0.6 percent, to
3,668.83 points, while the Shanghai Composite Index
gained 0.5 percent to 3,188.06 points.

The raw material sector firmed 0.9 percent as
global commodity prices rose on the back of a weaker U.S.
dollar.

“The weaker dollar benefited China’s commodity-related
stocks in an indirect way,” said Chen Yong, analyst at Lianxun
Securities.

“Besides, a strengthening yuan eases capital outflow fears.”

Reflecting the dollar’s broad weakness, China’s yuan rose
against the dollar on Thursday to its highest level in
7-1/2-months.

Receding fears of capital outflows from China added to
relief that China’s banking system does not appear to be
suffering from a cash shortage at the end of the second quarter,
as some had feared.

Citing “relatively high” liquidity, China’s central bank
skipped open market operations for the fifth day in a row on
Thursday.

Shares in China’s coal miners were particularly
strong, as the country said it will ban coal imports at small
ports from July 1, boosting China’s coking coal futures.

Shanxi Coking surged the maximum allowed 10
percent, while Shanxi Xishan Coal jumped 4.4
percent.
(Reporting by Luoyan Liu and John Ruwitch; Editing by Shri
Navaratnam)

Leave a Reply

Your email address will not be published.