Shanghai's key stock index surged in the morning session today despite a short slip at the opening bell. Stocks in the raw materials sector rallied after copper prices advanced and Liuzhou Iron & Steel Co reported stronger profit growth.

The Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B shares, jumped 3.04 percent, or 104.71 points, to 3,550.96 at 11:30am.

Gainers in the Shanghai market outnumbered losers 783 to 57, while 12 were unchanged.

The Shenzhen Composite Index, which covers the mainland's smaller stock market, was up 4.38 percent, or 44.05 points, to 1,049.94.

Jiangxi Copper, China's second-largest producer of the metal, advanced 6.13 percent, to 30.30 yuan (US$4.40), and was set for its highest close since March 31. Tongling Nonferrous Metals Group Co, the country's biggest, rose 5.31 percent, to 16.25 yuan. Yunnan Copper Industry Co added 6.56 percent to 33.29 yuan.

Copper rose 1.4 percent on Friday in London as a weaker US dollar increased the appeal of metals as a hedge against further declines in the currency.

Liuzhou Steel jumped 1.38 yuan, or the 10 percent daily limit, to 15.16 yuan. The company said 2007 profit rose 32 percent from a year earlier to 998.8 million yuan ($142.6 million) on sales that increased 27 percent. The stock resumed trading today after being suspended on Thursday.

Other steel makers also rose. Baoshan Iron & Steel Co, China's biggest steel maker, rose 3.84 percent, to 12.16 yuan. Wuhan Iron & Steel Co, the fifth biggest, gained 4.27 percent to 14.90 yuan.

China Petroleum & Chemical Corp, Asia's biggest oil refiner, also known as Sinopec, advanced 2.25 percent to 12.74 yuan. The company said today profit growth slowed last year as rising international crude oil costs and state curbs on fuel prices eroded earnings. Net income rose 5.4 percent to 56.5 billion yuan in 2007.

China Merchants Energy Shipping Co, the country's largest operator of international oil tankers, extended its surge after it increased the daily cap of 10 percent to 8.55 yuan this morning. The stock jumped 10 percent last Thursday, the last trading day before a three-day national holiday for the Qingming Festival.

The rise of China merchants Energy Shipping, the most in nine months, came after the company said its first-quarter profit likely doubled on higher rates.

Profit in the first three months of the year likely rose more than 100 percent, the Shanghai-based company said in a statement to the city's stock exchange on Thursday.

Elsewhere, Ping An Insurance (Group) Co, China's second-largest insurer added 4.27 percent to 61.56 yuan in the morning session. The insurer said it has set up a 20 billion yuan private equity company to buy stakes in Chinese companies looking to trade on the nation's domestic exchanges.

Meanwhile, Hong Kong-listed Zijin Mining Group Co, China's largest gold producer, plans to start selling as many as 1.5 billion shares in Shanghai on April 15 to raise funds for acquisitions and mining projects.

The China Securities Regulatory Commission approved the sale, which will represent 10.24 percent of the enlarged capital, Fujian-based Zijin Mining said in a statement to Shanghai's stock exchange today. The company hasn't set a stock price or when the shares will trade.

Zijin's shares have fallen 36 percent this year in Hong Kong amid concern about its stock sale and as investors deemed the shares expensive after an almost threefold gain last year. The price of gold surged to a record US$1,032.70 an ounce on March 17.

Zijin Mining needs 4.9 billion yuan for acquisitions and mining projects, it said in the statement. Chairman Chen Jinghe said on March 10 that the company may buy mines overseas.

(Shanghai Daily April 7, 2008)