China Shares End Higher on Possible Aluminum Stockpiling

SHANGHAI (Dow Jones)--China's shares ended higher Wednesday, led by gains in aluminum companies after a report said the government could stockpile the metal.

The benchmark Shanghai Composite Index, which tracks both A and B shares, ended up 0.4%, or 7.53 points, at 2055.42, after falling 1.5% Tuesday amid a selloff in property developers. The Shenzhen Composite Index rose 0.3%, or 2.45 points, to 818.60.

Analysts said the Shanghai index is likely to continue to consolidate between 2000 and 2100, as investors don't expect strong economic stimulus from Beijing in the short term.

"Chances of a fresh round of aggressive monetary easing remain slim, even after the new leadership takes the reins," said Du Changchun, an analyst with Northeast Securities.

The 18th Communist Party Congress ended earlier Wednesday and China's ruling party selected its new central committee, although it has yet to unveil the Politburo Standing Committee's new lineup.

"Investors are waiting for the final result, and the market is likely to welcome a Politburo Standing Committee lineup that includes more leaders who favor reform," said Changjiang Securities analyst Wu Bangdong.

Metal firms led gainers, with aluminum companies surging on hopes of an improvement in product prices after the state-run China Securities Journal Wednesday cited unidentified companies as saying that the State Bureau of Material Reserve plans to stockpile 400,000 metric tons of primary aluminum by Dec. 29.

Chalco added 4.7% to 4.95 yuan ($0.80), Jiaozuo Wanfan Aluminum Manufacturing climbed 3.2% to CNY10.84, and Yunnan Aluminum gained 2.7% to CNY4.98.

The financial sector strengthened because of bargain hunting after recent losses.

Sinolink Securities ended 3.9% higher at CNY14.76, Everbright Securities advanced 1.9% to CNY11.01, and China Life Insurance was 1.1% higher at CNY17.86.

Trading volume on the Shanghai and Shenzhen stock exchanges fell 16% to CNY72.72 billion, from CNY86.29 billion Tuesday.

The November index futures contract, the most actively traded of the four index futures contracts traded in China, ended up 0.2% at 2217.4.

The futures are referenced to the CSI-300, an index of 300 Shanghai- and Shenzhen-listed yuan-denominated A shares. The CSI-300 ended 0.5% higher at 2223.11.

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