HK, Shanghai shares dip; Chalco up on rare-earth investment
By Vikram S.Subhedar and Farah Master
HONG KONG/SHANGHAI (Reuters) - China's key stock index was lower by midday Tuesday, with weakness in financials and profit-taking in airlines offsetting outperforming rare earth and agricultural issues.
The Shanghai Composite Index fell to 2,620.75, with the 60-day moving average at 2,560 providing strong support ahead of the week-long National Day holiday starting on Friday.
Aluminum Corp of China Ltd (Chalco) jumped by its 10 percent daily limit after its parent said it would take a majority stake in Jiangxi Rare Metals Tungsten Group.
"Rare earths and non-ferrous metals are the hot sectors today. These sectors have a very supportive background," said Zhang Yanbing, analyst at Zheshang Securities in Shanghai.
China produces more than 90 percent of the global supply of rare earths - minerals used in a range of consumer products ranging from rechargeable batteries to fiber optics - with global demand forecast to grow rapidly as demand for green products rises.
China recently announced a range of measures to support the growth of its rare earth mining industry and also cracked down on illegal mining.
Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-Tech Co Ltd rose 5.4 percent. Eastern Gold Jade Co Ltd rose by its 10 percent limit, while Rising Nonferrous Metals Share Co Ltd gained 9.5 percent.
Airlines were among the top losers, retreating after recent strong gains on the back of a stronger yuan. A strong yuan is seen as beneficial for Chinese airlines who buy aircraft in foreign currency. Continued...