China Shares Rise on Fund Buying

SHANGHAI, China (AP) -- Chinese stocks rose Thursday on buying by funds seeking companies with relatively lower valuations, with steel and coal mining shares in strong demand.

The benchmark Shanghai Composite Index gained 2 percent, or 100.96 points, to 5,273.59. The Shenzhen Composite Index rose 2.6 percent to 1,458.91.

Coal miners were in strong demand because of their relatively cheap valuations and positive outlook, said Hu Jiaming, an analyst at CSC International Holdings.

Shanxi Xishan Coal & Electricity Power surged by the daily 10 percent limit, to 55.57 yuan, as did Hebei Jinniu Resources, which closed at 28.37 yuan.

Steel firms also rose with Hunan Valin Steel Tube & Wire up 10 percent at 13.05 yuan. Maanshan Iron & Steel also rose 10 percent, to 14.49 yuan, and Baoshan Iron & Steel gained 3.3 percent to 18.61 yuan.

Aluminum Corp. of China Ltd., known as Chalco, slipped 0.6 percent to 48.83 yuan, following a 4.5 percent gain the previous day. The company's yuan-denominated shares were unsettled by a 10 percent price cut in the company's spot alumina price and by news that Alcoa Inc. sold its stake in Chalco for $2 billion on Wednesday.

In currency dealings, tight liquidity conditions in China's money market and the U.S. dollar's weakness against the euro helped push the yuan to a fresh high against the dollar.

The dollar was at 7.5115 yuan in the over-the-counter market, down from Wednesday's close of 7.5216.

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