Chinese shares surge more than four percentDecember 3rd, 2008 - 5:14 pm ICT by IANS
Beijing, Dec 3 (Xinhua) Chinese equities staged a big rally Wednesday, with the key Shanghai index rising more than four percent, which was led by gains for big banks and oils. The benchmark Shanghai Composite Index, which covers both A and B shares, closed at 1965.41 points, up 4.01 percent or 75.78 points. The smaller Shenzhen Component Index added 245.26 points, or 3.61 percent, to close at 7041.07 points.
Gainers outnumbered losers by 860 to 6 in Shanghai and by 739 to 3 in Shenzhen. Combined turnover was up to 132.78 billion yuan ($19.4 billion).
The surge came after China Securities Regulatory Commission chairman Shang Fulin said the regulator was considering allowing institutional investors to invest more in the equity market.
The banking sector, which has been weak and dragging down the indices over the past weeks, put up an upbeat performance after China Construction Bank (CCB) said in a stock-filing that the Central Huijin Investment Co., Ltd., an investment arm of sovereign wealth fund China Investment Corporation, had increased its CCB A-shares to 70.8 million by Nov 28.
CCB, also listed in the Hong Kong stock market, also said Bank of America had bought 19.6 billion of its H-shares from Central Huijin.
As a result, nearly 20 bank stocks rose by 5.30 percent on average. CCB gained 5.20 percent to end at 4.25 yuan. The Industrial and Commercial Bank of China, the country’s largest lender, rose nearly three percent to 3.87 yuan. Bank of China added 3.19 percent to finish at 3.23 yuan.
Shanghai Pudong Development Bank, China Merchants Bank and Industrial Bank all jumped by more than six percent to end at 12.90 yuan, 12.49 yuan and 14.69 yuan, respectively.
Oils also gained significantly and helped push up the indices. PetroChina, the largest component of the key Shanghai index, rose 2.25 percent to 11.40 yuan. Sinopec, another heavyweight, added 4.42 percent to 8.27 yuan.
Insurers rebounded from their weak performance in the last two days. Heavyweight China Life, the nation’s leading life insurer, rose 4.13 percent to 18.90 yuan, while Ping An Insurance jumped by 6.21 percent to close at 23.95 yuan.
Despite the fall in world oil prices, shares of coal producers, which market analysts believed were undervalued after continuous falls, made a huge rally with an average eight percent increase.