Gold Drops to $1,200/oz for First Time Since June in New York
China Stocks Climb as Communication Shares Gain; Brokerages Fall
China’s stocks rose for the first time in four days as communication shares and rare-earth producers rallied after the government said it will expand the country’s broadband network. Brokerages declined.
ZTE Corp. (000063) and Yonyou Software Co. jumped by the 10 percent daily limit. Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co. advanced 8 percent. Citic Securities Co. and Southwest Securities Co. (600369) fell at least 1.2 percent after a trading error at Everbright Securities Co. caused the biggest swings in the nation’s shares in four years on Aug. 16. Trading in Everbright Securities was suspended.
The Shanghai Composite Index (SHCOMP) added 0.8 percent to 2,085.60 at the close, erasing an earlier loss of 0.8 percent. Gauges of technology and telecommunication shares have surged more than 40 percent this year, compared with a decline of 8.1 percent by the Shanghai gauge. The index jumped on Aug. 16 from a loss of as much as 1 percent to a gain of 5.6 percent in two minutes during the morning session, then ended the day with a 0.6 percent drop.
“Technology companies are benefiting from government efforts to boost the industry,” said Wang Weijun, a strategist at Zheshang Securities Co. in Shanghai. “The market is lowering expectations about the development of brokerages’ proprietary trading business.”
The CSI 300 Index added 1.2 percent to 2,331.43. The Hang Seng China Enterprises Index (HSCEI) slipped 0.2 percent.
The Shanghai Composite has tumbled about 40 percent from its August 2009 high, erasing about $644 billion in market value, as the world’s second-largest economy slowed and local investors emptied more than 2 million equity trading accounts. Only Greece’s ASE Index has fallen more in percentage terms.
Gauges of telecommunications and technology shares climbed at least 3.5 percent today. ZTE, China’s second-biggest phone-equipment maker, rose to 16.96 yuan, its highest close since May 2012. Fiberhome Telecommunication Technologies Co. (600498) added 8.4 percent to 21.18 yuan. Yonyou Software jumped to 13.89 yuan, taking its 2013 advance to 41 percent.
The government will boost spending on fiber optic and wireless networks to ensure half of households have broadband access by 2015 and a third of cellular users have access to third-generation or other fast networks, according to a statement on the government’s website over the weekend.
Baotou Rare-Earth, China’s biggest producer of rare earth, surged 8 percent to 30.16 yuan. China Minmetals Rare Earth Co. (000831) gained 5.6 percent to 27.13 yuan.
“China’s economic situation is ‘‘good’’ and economic growth of 7.5 percent is at a ‘‘normal level,’’ People’s Bank of China Governor Zhou Xiaochuan said in an interview with CCTV.
Citic Securities, China’s largest broker by market value, fell 1.2 percent to 10.88 yuan. Haitong Securities Co. (600837), the second biggest, slumped 2.1 percent to 10.99 yuan. Southwest Securities dropped 3.8 percent to 9.01 yuan. Trading in Everbright Securities shares is suspended until tomorrow. China Everbright Ltd., which has a stake in the brokerage, slid 1.6 percent in Hong Kong.
The China Securities Regulatory Commission has started an official investigation into Everbright Securities, the watchdog said. The brokerage reported a mark-to-market loss of about 194 million yuan ($31.7 million) based on Aug. 16 closing prices and said the final loss may change.
Everbright Securities’ trading system placed an accumulated 23.4 billion yuan of buy orders, of which 7.27 billion yuan was transacted. The brokerage sold 1.85 billion yuan in exchange-traded funds, along with short-selling 7,130 contracts of index futures, according to the CSRC. The regulator has temporarily banned the brokerage from conducting proprietary trading, the company said.
Everbright Futures Co., a wholly-owned unit of Everbright Securities (601788), held on Aug. 16 10,194 short contracts in the CSI 300 expiring next month, the most among futures brokerages, according to data from the China Financial Futures Exchange.
New home prices climbed in 69 of the 70 cities the government tracked last month from a year earlier, the National Bureau of Statistics said, matching data for May and June.
The southern city of Guangzhou posted the biggest advance, rising 17 percent from a year earlier, while prices in Beijing and Shanghai both increased 14 percent. All three cities had their biggest gains since the government changed its methodology for the data in January 2011.
Bo Xilai, the former Politburo member charged with bribery and abuse of power, will go on trial on Aug. 22, bringing the Communist Party’s biggest scandal in more than 20 years a step closer to its conclusion.
Bo will face trial in the eastern city of Jinan in Shandong province, the official Xinhua News Agency said yesterday. He will face charges of bribery, graft and abuse of power, according to Xinhua.
To contact Bloomberg News staff for this story: Zhang Shidong in Shanghai at firstname.lastname@example.org