The Associated Press August 30, 2010, 4:32AM ET

China shares rise on Bernanke's remarks

Chinese shares rose Monday after investor confidence in the durability of the global recovery was boosted by Federal Reserve Chairman Ben Bernanke's promise to take action if the U.S. economy falters.

The benchmark Shanghai Composite Index jumped 41.92 points, or 1.6 percent, to close at 2,652.66. The Shenzhen Composite Index for China's smaller second exchange gained 2.6 percent to 1,158.22.

Investors took heart after Bernanke said Friday that the U.S. central bank is ready to take bold action to support the U.S. economy if needed.

"Investors believed that the U.S. government will not let the economy fall again, and that has underpinned hopes that the Chinese government will soon lift credit curbs," said Wen Lijun, an analyst for Nanjing Securities.

Nonferrous metals led the gains on prospect for higher demand on a string of local stimulus plans. Minmetals Development Co. surged 6.5 percent to 18.4 yuan, while Jiangxi Copper Ltd., China's biggest metal producers, soared 5.4 percent to 30.6 yuan.

Rare earths makers rose on better earnings. Inner Mongolia Baotou Steel Rare Earth High Tech Co. advanced by the daily 10 percent limit to 53.92 yuan.

Industrial & Commercial Bank of China Ltd., China's biggest commercial lender, edged up 0.5 percent to 4.12 yuan. Agricultural Bank of China Ltd. added 0.4 percent to 2.7 yuan, while Bank of China Ltd. rose 0.3 percent to 3.39 yuan.

In currency markets, the yuan weakened to 6.8023 to the U.S. dollar from Friday's close of 6.7981.

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Associated Press researcher Bonnie Cao in Beijing contributed to this report.


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