AIRLINES took flight and lifted Shanghai's key stock index higher in the morning session today after crude oil prices dropped the most in a month, easing concerns that fuel costs will hurt earnings.
The Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B shares, edged up 0.33 percent, or 11.10 points, to 3,386.50 at 11:30am.
Gainers in the Shanghai market outnumbered losers 474 to 284 while 31 were unchanged.
The Shenzhen Composite Index, which tracks the smaller domestic stock exchange, was up 0.46 percent, or 4.69 points, to 1,035.74.
Air China Ltd, the world's biggest airline by market value, rose 2.75 percent to 12.71 yuan (US$1.83). China Southern Airlines Co, the nation's biggest carrier by fleet size, added 2.39 percent to 10.70 yuan. Jet fuel accounted for about 40 percent of Chinese airlines' costs in 2007, according to annual reports.
Oil yesterday fell more than US$3 a barrel, the biggest one-day drop since April 29, to close at US$128.85 a barrel in New York. Futures reached a record of US$135.09 on May 22 and have doubled in the past year. Jet fuel prices in Singapore have increased about the same amount.
China Construction Bank Corp added 1.70 percent 7.18 yuan.
Bank of America Corp, the second-largest United States-based bank by assets, plans to increase profit overseas by investing another US$1.86 billion in China Construction Bank, China's second largest, at below-market prices, boosting its stake to 10.8 percent from 8.2 percent.
Sichuan Changhong Electric Co, the country's second-biggest maker of televisions, edged up 0.33 percent to 6.08 yuan.
Changhong said today the May 12 earthquake caused it economic losses of about 149 million yuan. An employee was killed in the disaster while 12 others were injured.
Production at the company's factories was halted until May 19. One of Changhong's warehouses was converted into a temporary shelter for people displaced by the quake.
The TV maker said earlier that it was confident the natural disaster wouldn't stop it from reaching its 2008 targets. Changhong in April said it targeted about 30 billion yuan of sales for this year.
On the other side, Hunan Changfeng Motors Co, the Chinese maker of sport-utility vehicles partly owned by Japan's Mitsubishi Motors Corp, slumped 8.31 percent to 10.59 yuan.
The company plans to raise as much as 908 million yuan selling new shares to finance an acquisition and production expansion.