A Chinese investor
looks at a stock prices board at a private security company, February 28,
2007 in Shanghai, China. [AP]
Chinese stocks recovered four per cent Wednesday from the sharpest fall in a
decade in the previous session as other Asian markets continue to fall.
benchmark Shanghai Composite Index rose 109.28 points, or 3.94 per cent, to
2,881.07. The Shenzhen Composite Index gained 27 points, or 3.80 per cent to
736.81. The Shanghai and Shenzhen 300 index of major companies was up 87.08
points, or 3.54 per cent, to 2,544.57.
The market may embrace a piece of good news as a top leader is expected to
speak on how to develop the market in a stable way Wednesday evening, web portal
In contrast to Tuesday's plunge for most stocks, the advancing shares far
outnumbered the decliners in both bourses. In Shanghai, 711 shares rose while
only 63 ones fell. The gainers outnumbered the losers by a ratio of 13 to 1 in
the Shenzhen market.
Big caps led the recovery. The Industrial and Commercial Bank of China, the
nation's biggest lender, rose 4.48 per cent to 4.90 yuan after tumbling 7.86 per
cent Tuesday. China Life, the country's biggest insurer, gained 5.81 per cent to
35.86 yuan against the previous session's 9.02 per cent loss.
China United Telecommunications, the nation's No. 2 mobile operator, was up
7.58 per cent to 5.25 yuan. Baoshan Iron & Steel Co., China's biggest
steelmaker, finished up 4.99 per cent to 9.47 yuan after losing 9.98 per cent
The gains reversed the biggest fall in a decade in the previous session.
Tuesday, the Shanghai Composite Index fell 268.81 points, or 8.84 per cent, to
2,771.79, the biggest fall in points since the index was launched and the
sharpest percentage fall in a decade. The Shenzhen Composite Index plummeted
66.3 points, or 8.54 per cent to 709.81. The Shanghai and Shenzhen 300 index of
major companies in the two bourses, lost 250.18 points, or 9.24 per cent to
The decline was partly blamed on speculations about capital gains tax.
However, the Ministry of Finance and the State Administration of Taxation
rejected the rumor, saying they have no plans to levy capital gains tax on
retail stock investors, according to the Shanghai Securities News.
Tuesday's fall spilled over to other Asian markets, and Wall Street. Shares
in Tokyo, Hong Kong, Singapore, Malaysia, Australia, New Zealand, the
Philippines and Indonesia all tumbled more than three percent during Wednesday
morning trading, following dismal overnight losses on Wall Street, the worst
since the Sept. 11, 2001, terrorist attacks.