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Uncertainties cloud stocks amid volatile trading

(Xinhua)
Updated: 2008-04-22 17:39

Chinese shares ended on Tuesday trading up 0.99 percent after tumbling below the 3,000-point mark in the mid-session. The eventual gain was secured by sharp rises in financial and real estate large-caps, dealers said, noting more uncertainties would continue to haunt the market.

The benchmark Shanghai Composite Index, which covers both A and B shares, closed up 0.99 percent, or 30.82 points to 3147.79. Limited effects of the government's stimulus policy dampened sentiment further, analysts said.

The index is likely to float around the 3,000-point mark for a period of time as a wait-and-see attitude is weakening market sentiment, an analyst with Shiji Investment said.

Shares received a boost on Monday morning from a change in the rules, which placed curbs on the sale of non-tradable shares that come out of lock-up periods.

The move was addressing market concerns over a flood of shares coming into the secondary market after a shareholding reform, which could "put constant pressure on stock prices and distort the price formation mechanism," it said.

The support policy, however, failed to restore the confidence of investors who have been hit severely by recent falls.

The Shanghai bourse opened 1.29 lower this morning and broke the psychological threshold of 3,000 points in the mid-session, which has fallen to half its peak of October 16 last year.

The index rebounded soon after, boosted by heavyweights in the financial sector which rose 3 percent in general. Three banking shares including the Bank of Beijing rose by the daily limit of 10 percent.

Steel shares also saw a greater than 2 percent increase on average, as Wuhan Iron and Steel and Angang Steel led the rise.

Real estate shares showed a robust performance as China Vanke gained 4.4 percent and Poly Real Estate Group surged 4.79 percent.

The Shenzhen Component Index gained 0.73 percent to 11,174.77.

The Shanghai bourse saw 277 gainers versus 545 losers, and Shenzhen reported 180 gainers and 473 losers.

Aggregate turnover reached 86.60 billion yuan (about $12.37 billion), down from 115.69 billion yuan on Monday.