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Chinese shares rise to new one-year high

AP - Saturday, July 4

BEIJING - China's shares edged up Friday to a new one-year high on optimism about a possible economic revival, with real estate and dairies up but banks and metals mixed.

The benchmark Shanghai Composite Index climbed 1.67 points, or 0.05 percent, to close at 3,061.93, its highest level since June 10, 2008. For the week, it rose 3 percent.

The Shenzhen Composite Index for China's second, smaller market rose 1.38 percent, or 13.66 points, to 1,000.68.

Real estate rose strongly. Poly Real Estate Group surged 6.9 percent to 14.28 yuan, while rival China Vanke Ltd., the country's biggest developer, gained 1 percent to 29.30 yuan.

"Investors kept pouring money into the real estate sector by grabbing the stocks of the companies with large land reserves," said Xu Zhiyuan, an analyst for Capital Edge Investment & Management in Shanghai.

Xu cautioned that prices might weaken if the government tightens credit or approves new initial public offerings for large companies following the lifting of a moratorium on IPOs last month. Investors are worried that an influx of new shares might depress prices.

Bright Dairy and Food Co. advanced 2.8 percent to 7.28 yuan, while Inner Mongolia Meng Niu Dairy Industry Co. added 1.1 percent to 14.96 yuan.

Banks and financial stocks were mixed. Industrial & Commercial Bank of China Ltd., the country's biggest commercial lender, added 0.18 percent to 5.49 yuan. No. 2 China Construction Bank Ltd. shed 0.3 percent to fall to 6.38 yuan.

Metals, tourism and energy stocks also were mixed.

In currency markets, the yuan weakened slightly to 6.8325 to the U.S. dollar, down from Thursday's 6.8324.

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