HONG KONG, Oct. 14 (Xinhua) — European governments’ commitments to recapitalize banks fueled sharp gains on Asian bourses Tuesday, leading Hong Kong shares to close 3.19 percent higher.

Residents wait at a bus stop before an electronic board displaying Hang Seng Index in south China’s Hong Kong on Oct. 14, 2008.  (Xinhua Photo)

    Building on the previous session’s 10 percent rally, the blue-chip Hang Seng Index rose 520.72 points, or 3.19 percent, to 16,832.88 after trading between 16,615.01 and 17,141.05 during the session.

    Turnover moved up to 81.66 billion HK dollars (10.53 billion U.S. dollars) from Monday’s 72.59 billion HK dollars (9.32 billion U.S. dollars).

    With the news that European governments pledged to spend tens of billions of pounds and euros on stakes in struggling banks and offer hundreds of billions more in guarantees aimed at helping banks borrow the money they need to do business, the Dow Jones Industrial Average raised 936.42 points, or 11.08 percent, to 9387.61 on Monday, its biggest points gain ever. Asian stock markets also rose sharply Tuesday.

    But traders and analysts said profit-taking would likely erode the local market’s gains in the near term as the global financial turmoil isn’t over.

    The Hang Seng Index trimmed its gains in the afternoon, fallingfrom an intraday high of 17,141.05, after China shares ended down on profit-taking and concerns about the U.S. market outlook. The benchmark Shanghai Composite Index finished 2.7 percent lower at 2017.32.

    Sun Hung Kai Properties rose 11 percent to 74.00 HK dollars after a 14 percent rise Monday. It had dropped 50 percent between Aug. 29 and Friday. Henderson Land ended 8.1 percent higher at 30.00 HK dollars, following a 16 percent rise in the previous session.

    Confidence slowly regained on banks, as Bank of China rose 3.15percent to 2.86 HK dollars, ICBC moved up 3.04 percent to 4.28 HK dollars. But Hang Seng Bank moved up 1.09 percent to 119 HK dollars.

    China Overseas gained 13 percent to 9.60 HK dollars, having dropped 17 percent since the start of September. Heavyweight China Mobile rose 2.9 percent to 76.95 HK dollars on expectations of robust third-quarter results due late October.

    Higher oil prices boosted upstream oil companies. CNOOC rose 14percent to 7.17 HK dollars and PetroChina gained 3 percent to 6.9 HK dollars.

    Cheung Kong rose 5.30 percent to 77.4 HK dollars, while Cathy Pacific moved up 3.96 percent to 10.6 HK dollars. China Shenhua rose 11.97 percent to 15.20 HK dollars and China Life rose 1.92 percent to 26.00 HK dollars.

    BEIJING, Oct.14 (Xinhua) — Shougang Group, a Chinese iron and steel maker, announced Monday it would auction off most of its blast furnaces in western Beijing.

    The No. 5 furnace, the first large facility ever constructed for iron making by Shougang, will be the first to be sold, said a source of the group.

    With a capacity of 1,036 cubic meters, this furnace stopped production in July 2005. That’s when Shougang was ordered to relocate to Caofeidian, an islet in the Bohai Sea, in order to reduce pollution before the Olympic Games.

    Altogether 30 million tons of iron had been produced through this furnace.

    Yanhuang Auction Co. Ltd., a Beijing-based firm that will be responsible for the auction, confirmed the plan.

    ”Each bidder is required to go through registration procedures with the auction company,” said a Yanhuang spokesman.

    Potential bidders can look at Shougang’s assets listed for auction, which include the No. 5 furnace and other equipment such as refrigerating machinery and cranes from the Beijing coking plant, Tuesday through 9 a.m. Friday.

    The auction firm declined to disclose financial terms for the auction and an exact date has not been set.

    Founded in 1919, Shougang is widely considered the flagship of China’s heavy industry. With its production based just 17 km west of Tian’anmen Square in central Beijing, it has five iron blast furnaces and one coking oven at its Shijingshan plants.

    Shougang Group began relocating its facilities to Hebei Province in 2005 due to the government’s efforts to reduce air-pollution in Beijing. The company promised its new facility would use advanced technologies to reduce environmental impact.

    Through June, it had extinguished fires at two of its blast furnaces and one coking oven.The remaining furnaces will close by 2010.

    ”Only one or two of them will be kept as a reminder of industrial relics, the remainder will all be auctioned off like the No. 5 furnace”, said a high-ranking official of the Shougang Group who declined to be identified.

    After relocation, Shougang said the old factory site in western Beijing will be developed into a complex for tourism, entertainment, business, and residential housing.

    BEIJING, Oct. 14 (Xinhua) — China’s central bank reported on Tuesday the country’s foreign exchange reserves surged to 1.9056 trillion U.S. dollars through September.

    The figure was up 32.92 percent from the same period last year, the People’s Bank of China said in a report published on its website.

    The forex reserves have been growing rapidly in recent years with the ballooning trade surplus. The country overtook Japan to become the world’s largest holder of forex reserves in February 2006.

    The growth of the reserves, however, had been slowing since the beginning of this year, accompanied with a shrinking trade surplus. The latest growth further eased from a 35.73 percent riseby through June and 47.7 percent in 2007.

    The forex figure also came as the General Administration of Customs said on Monday the country’s trade surplus narrowed 2.6 percent year-on-year to 180.9 billion U.S. dollars in the first three quarters.

    The central bank said 377.3 billion U.S. dollars were added to the forex reserves in the first three quarters.

    In September, the reserve build-up expanded by 21.4 billion U.S. dollars, compared with rises of 36 billion U.S. dollars and 39 billion U.S. dollars in July and August, respectively.

    The monthly increase was averaged at 41.9 billion U.S. dollars in the first nine months, still higher than an average 38.5 billion U.S. dollars recorded last year.

    The average monthly increase for the third quarter alone was 32billion U.S. dollars, and higher than market expectations.

    Analysts said the rapid growth in the third quarter was a result of growing exports and expanding trade surplus despite weakened global demand.

    Official figures showed the country’s trade surplus had been expanding by more than 27 billion U.S. dollars each month in the third quarter, which also overran market expectations.

    Tan Yaling, a China International Economic Relations Society economist, said the growth in forex reserves also indicated a growing interest in yuan assets as a haven for investment amid theglobal turmoil.

    ”Under the current financial crisis that originated in the United States and with the euro also softening, China’s yuan-denominated assets appear relatively safer and created an influx of foreign investment, which also contributed to the growth in the third quarter.”

    Zhang Bin, a Chinese Academy of Social Sciences researcher, said the U.S. financial crisis had a limited impact on the country’s huge forex reserves, as the forex supervisor had diversified the holdings so as to avert some risks.

    Through September, the M2 — a broad measure of money supply, which covers cash in circulation plus all deposits — grew by 15.29 percent from a year ago to 45.29 trillion yuan (6.7 trillionU.S. dollars).

    The M2 growth was 0.71 percentage points lower than the previous month. The figure had fallen for the fourth consecutive month as the government’s tightening measures started to take hold.

    Tightening policies, including several interest rate hikes, since the end of last year, adopted to fight soaring inflation and overheating risks, however, had recently been replaced by two rate cuts in less than a month.

    Such moves were taken to boost the domestic economy amid worries over the deepening global financial crisis.

    Through September, the narrow measure of money supply, M1, was up 9.43 percent to 15.57 trillion yuan, again lower than the 11.48percent rise in August, according to the central bank.

    The central bank report also said the country’s financial system remained stable.

    Outstanding local currency loans expanded 14.48 percent to 29.65 trillion yuan. The growth was 0.19 percentage points higher than the previous month.

    Outstanding loans in foreign currencies, however, rose only 30.86 percent to 269.2 billion U.S. dollars, compared with a gain of 37.84 percent in August.

    The report said local-currency deposits were up 18.79 percent to 45.49 trillion yuan, while foreign-currency deposits grew 9.37 percent to 174.2 billion U.S. dollars.

    Local-currency transactions on the inter-bank market reached 9.49 trillion yuan last month. Average daily transactions were 451.9 billion yuan, up 17 percent year on year.

    BEIJING, Oct. 14 (Xinhua) — Chinese shares fell 2.71 percent on Tuesday despite early morning gains.

    The benchmark Shanghai Composite Index gained 1.21 percent in the morning session, but dropped 56.25 points to end at 2,017.32 despite growth in surrounding markets. The Shenzhen Component Index closed at 6,473.12 points, down 1.5 percent.

    The poor performance of the domestic market against global stock increases greatly damaged investor confidence, analysts said.

    Japanese Nikkei index soared 14.2 percent to 7,447.57 points, stimulated by a series of recent actions by governments and central banks worldwide to ease the global credit crunch. Hong Kong Hang Seng index also rose 3.33 percent.

    Financial shares dropped in the afternoon on profit taking, after they made major gains Monday and Tuesday morning, said analysts. Citic Securities and Haitong Securities plunged by the daily limit of 10 percent to 20.41 yuan (about 3 U.S. dollars) and19.91 yuan respectively.

    Other blue chips also suffered, which helped pulled down the overall market. PetroChina weakened 1.65 percent to 11.9 yuan, and China Merchants Bank dropped 1.91 percent to 14.93 yuan.

    Dairy-related shares bucked the trend. Yili and Bright made second day surges by the daily limit of 10 percent after making clarifications on losses over melamine-tainted products.

    Aggregate turnover edged up to 76.8 billion yuan (11.3 billion U.S. dollars) from the previous day’s 57.6 billion yuan. The two bourses saw 217 gains and 1,373 losses, with 120 unchanged.

    BEIJING, Oct.14 (Xinhua) — The rising yuan along with escalating production costs, drove half of China’s toy exporters out of the market in the first seven months of this year, the General Administration of Customs said in a report Monday.

    A total of 3,631 toy exporters or 52.7 percent of the industry’s businesses shut down in 2008.They were mainly small-sized toy producers with an export value of less than 100,000 U.S. dollars.

    Customs data showed 3,507 toy exporters still in business.

    China, the world’s largest toy exporter, saw a remarkable business slowdown as a result of rapid appreciation of the yuan, rising human capital and production costs and falling export rebates.

    From Jan.to Aug. the country exported 35.29 billion yuan (5.17 billion U.S. dollars) worth of toys. That’s up 1.3 percent from the same time period in 2007. However, the growth rate is actually 21.80 percent slower than that of last year.

    According to the customs report, the U.S. credit crisis is part of the reason exports to the United States dropped 5.2 percent to 1.62 billion U.S. dollars in the first seven months of the year.

    The General Administration of Customs also blamed small-sized toy producers for not adapting to policy and export environment changes.

    Growing international trade protectionism is another reason the toy industry was hit hard, the report said.

    ”Last year was the most difficult time in decades for the Chinese toy industry,” said the vice chairman of the China Toy Association, Liang Mei.

    Western countries raised quality standards and issued several recalls on Chinese toys in 2007.

    Liang said those standards forced domestic exporters to jack up production costs, thus driving many small-sized companies out of the market.

    To repair the image of toys made in China, the country conducted special campaigns to improve quality and banned many unqualified companies from exporting toys.

    Licenses of 600 Chinese toy exporters were revoked at the beginning of this year, according to figures provided by the General Administration of Quality Supervision, Inspection and Quarantine.

    BEIJING, Oct. 14 (Xinhua) — China’s benchmark Shanghai Composite Index on the Shanghai Stock Exchange closed at 2,017.32 points on Tuesday, down 56.25 points, or 2.71 percent, from the previous close.

    A Share Index: 2,118.79 points, down 59.13 points, or 2.72 percent;

    B Share Index: 113.09 points, down 2.33 points, or 2.02 percent;

    Total Turnover: 55.379 billion yuan.