SHANGHAI - China's main stock index climbed 2.32 percent on Wednesday, led by
banks, after Tuesday's rebound convinced some that the downtrend of the past
week might have ended.
"The index probably will hit 2,800 points soon, or even higher, since the
short-term correction is over," said Zhang Yanbing, analyst at Kinghing
Securities. "Financials are leading a rise of the whole market."
Other analysts said, however, that profit-taking in richly valued financials
might not have finished, so any rise of the market would not be as fast as it
was in recent months.
"Heavyweight banks' prices are still quite high, so they remain vulnerable to
a small correction this week even though they fell so much last week," said Li
Wenhui at Huatai Securities.
The Shanghai Composite Index stood at 2,737.664 points at midday, near its
intra-day high of 2,745.387. It rose 2.42 percent on Tuesday.
Turnover in Shanghai A shares bounced back to
43.3 billion yuan ($5.7 billion) from 38.5 billion yuan on Tuesday
morning, suggesting investors were continuing to return to the market. A total of 533 stocks rose
while 283 fell.
Many said the index was likely to consolidate in coming weeks between 2,500
points, from near which it bounced on Tuesday, and strong resistance at 3,000,
which the market twice tried and failed to break last month.
Baoshan Iron and Steel Co. , which ended 1.32 percent lower on Tuesday after
news that the government may scrap value-added tax rebates on some steel
products, surged 4.97 percent to 8.66 yuan on Wednesday morning.
Industrial Bank , which listed on Monday, jumped 6.34 percent to stand at
25.32 yuan at midday after hitting an intra-day high of 26.00 yuan -- its
highest level since the listing.
Industrial & Commercial Bank of China , the most heavily weighted stock,
rose 1.02 percent to 4.94 yuan.
Minsheng Bank climbed 4.87 percent to 12.50 yuan. The bank said on Wednesday
that it planned to sell 2 billion new A shares, about 40 percent less than
The property sector bounced after remaining sluggish during Tuesday's market
rebound, suggesting investors were searching out laggard sectors. China Vanke
rose 6.03 percent to 15.47 yuan.
Guangzhou Shipyard International rose its 10 percent daily limit to 25.08
yuan after Morgan Stanley said it had upgraded its rating on the stock to
overweight from equal-weight on a potential asset injection from its state-owned
Morgan raised its target for the A shares to 30.2 yuan. The company's Hong
Kong-listed shares were up 30.43 percent at HK$24.00 at midday.
Kweichow Moutai rose 3.38 percent to 98.99 yuan after a senior executive said
in a Reuters interview on Tuesday that the liquor maker continued to enjoy
strong earnings growth which justified the rapid rise in its stock price. ($1 =