Stocks News
- Chinese shares rebound by 1.4 pct on May 31
Date: 1-Jun-2007 Sources: (People's Daily)
Chinese shares buoyed by strong corporate performance rebounded slightly on Thursday, amid concerns over the market's future direction following Wednesday's sharp drop prompted by imposing a higher stamp tax on securities trading.
The benchmark Shanghai Composite Index, which tracks both yuan-denominated A shares and hard-currency B shares, closed at 4,109.65 points, up 56.56 points or 1.4 percent, after a plunge of 6.5 percent a day earlier.
The smaller Shenzhen Component Index closed higher at 12,944.23 points, up 317.08 points or 2.51 percent.
Combined turnover registered at the two bourses in Shanghai and Shenzhen shrank to 368.29 billion yuan (47.8 billion U.S. dollars), down more than 10 percent from the previous close.
The market carried on the downward trend to start lower in Thursday's morning session, and the benchmark composite index tumbled to 3,858.04 points.
However, it managed to recover gradually on the buying force at the two bourses and bounced back above 4,100 points at closing, with more than 40 stocks rising to the daily limit of 10 percent.
Blue chips which topped the list of rising stocks largely helped the rise. Sinopec, the country's largest refiner, closed at 14.85 yuan , up 1.35 yuan or 10 percent, which alone contributed nearly 30 points to the total market rise.
Shares that may directly benefit from the coming Olympic Games were strengthened, and real estate stocks continued to play a role.
Trading showed institutional investors were still optimistic about China's blue chips, as stocks with more than 20 percent held by funds were popular, indicating the attitude of funds toward the higher stamp tax.
Heavyweights and blue chips are major factors behind the rebound, and many stocks, though recovering slightly, demonstrated a weak momentum,
Analysts with United Securities, however, said the room for rebound was quite limited as the heavyweights seemed unable to lead the market completely out of the slump.
The tripling of the stamp tax on trading triggered a mixed response from individual investors. Some saw it as 'a good opportunity to buy more', while some planned to sell.
The bullish run has attracted Chinese investors to open more than 100 million accounts to engage in the share trading by May 28, with new A-share accounts hitting 14 million this year, almost five times the total A-share accounts opened last year.
The Hushen 300 Index reflecting the combined movements of the Shanghai and Shenzhen stock exchanges reversed the downward trend to close at 3927.95 points Thursday, up 41.49 points or 1.07 percent.
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