China Shares Rise On World Expo Enthusiasm

From the AP in Shanghai:

Chinese shares rose Monday on World Expo enthusiasm, led by airline and tourism stocks.

The benchmark Shanghai Composite Index edged up 12.95 points, or 0.4 percent, to close at 3,237.1. The Shenzhen Composite Index for China's smaller second exchange added 1.2 percent to 1,240.98.

Analysts said investors are looking for smaller shares amid liquidity jitters after the central bank's order last week for more bank reserves.

Over the weekend, Chinese President Hu Jintao called for a successful Shanghai World Expo ahead of Thursday's 100-day countdown to the event.

"Smaller Expo-related shares are among those investors are buying, while heavy weights are sluggish," said Zhang Gang, an analyst for Central China Securities in Shanghai.

Shares of Shanghai-based companies also soared on hopes of more business driven by the six-month long Expo. Shanghai Shentong Metro Co. advanced the daily maximum of 10 percent to 14.45 yuan, while Shanghai New World Co., a local department store, surged 7.2 percent to 17.94 yuan.

Airline and tourism shares rose on expectations of higher revenue ahead of the Chinese New Year holidays next month.

China Eastern Airline Co. gained 5.1 percent to 6.65 yuan, while AirChina Ltd., the country's biggest international carrier, jumped 4.6 percent to 11.09 yuan.

Guilin Tourism Corp. advanced 10 percent to 14.36 yuan, while Beijing Capital Tourism Co. rose 5.4 percent to 24.45 yuan.

Retailers extended gains after the Commerce Ministry on Friday said the growth rate in retail sales last year might have been the highest in two decades. The figures are expected later this week. Nanjing Xinjiekou Department Store Co. rose 4.8 percent to 12.45 yuan, while Beijing Xidan Department Store Co. added 2.9 percent to 12.43 yuan.

In currency markets, the yuan strengthened to 6.8267 to the U.S. dollar, up from Friday's close of 6.8270.

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