China stocks surge to all-time high

Updated: 2007-01-22 14:49

A Chinese stock investor checks the board at a security firm in Beijing in this file photo. China's stock indices surged more than 3 percent to an all-time high on Monday, boosted by the positive tone of a government meeting at the weekend. [AFP/file]

SHANGHAI - China's stock indices surged more than 3 percent to an all-time high on Monday as large-caps climbed, boosted by the positive tone of a government meeting at the weekend and by the favourable pricing of a big IPO.

The Shanghai Composite Index was up 3.57 percent to close the day at 2,933.19 points. The Shenzhen index hit 8,343.07, up 3.44 per cent. Gainers far outnumbered losers by 1,443 to 25.

The Shanghai index gapped up at the opening and any close above the previous January intra-day peak of 2,870 would be technically bullish, suggesting the market was breaking out of the consolidation in which it has remained this month.

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Turnover in Shanghai A shares was a huge 104.91 billion yuan, a multi-year high for the full day, against 46.4 billion yuan on Friday.

Industrial Bank on Sunday set the price range for its $2 billion Shanghai IPO, China's fourth-biggest, at the low end of market expectations and said it would issue 1 billion A shares, well below the 1.33 billion ceiling it had previously announced. This is expected to ensure a strong debut for the stock.

In addition, a meeting of top economic planners on Saturday called for continued action to develop and liberalise markets, although it did not announce any major, concrete new policies.

The important thing for the stock market was that the meeting did not express serious concern about overheating in the market or the economy, implying no strong official action to halt the equities bull run was in the works.

"The tone of the meeting encouraged buying in stocks of different sectors this morning, and it will probably have a good effect on the market in the long term," said Zhang Qi, analyst at Haitong Securities.

Shang Fulin, chairman of the China Securities Regulatory Commission, said in a speech published on Monday that the foundation for the long-term, stable development of the market was still not strong.

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