Heavyweight stocks reversed a downward trend today thanks to the de-freezing of 3.4 trillion yuan ($460.70 billion) of subscription funds and encouraging news from the State asset administrator.
PetroChina, weighting for over 20 percent in the benchmark Shanghai Composite Index, surged 1.2 percent to 29.59 yuan today after hitting a historical low yesterday. Others including China Unicom, Baosteel and CITIC Securities were all up to lift the index.
| Shanghai Composite Index Source: www.sinamold.wiki |
The Shanghai index opened higher from 4,878.07, maintained an upward path and closed at 4,941.78, 105.61 points or 2.18 percent higher. It went through the day above yesterday’s closing line, within a range between 4,868.35 and 4,960.42. Of the A shares listed in Shanghai, 738 rose, 38 fell and 70 ended flat. SDIC Xinji Energy rocketed 136 percent on its debut to the secondary market.
Today’s rebound by the large blue chips also presented a "birthday gift" to the Shanghai bourse, the larger market of China’s two exchanges, which celebrates its 17th birthday today. With high-flying blue chips including China Life, PetroChina and China Shenhua, coming to list in the bourse, the Shanghai exchange has risen this year. Statistics show that the total capitalization of stocks listed in the bourse ranks sixth in the world and second in Asia.
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Shenzhen Component Index |
The Shenzhen Component Index, tracking the smaller Shenzhen Stock Exchange, closed 312.90 points or 1.95 percent up to 16,387.01. Opening higher from 16,226.89, it mapped out a similar trend to its Shanghai counterpart, and hit its daily high at 16,180.31 and a low to 16,466.24. Of the A shares, 562 moved up, 35 dropped and 76 saw little change in prices.
Stocks in media, culture, finance and information technology were particularly strong. Closed-end funds and foreign-currency denominated B shares also caught up with the surge.
Analysts attributed today’s strong performance to the release of the subscription funds for three new stocks, China Pacific Insurance Group, Xinjiang Goldwind Science and Technology and Liaoning Publishing and Media. After hitting a new record of 3.4 trillion yuan for the three stocks by retail and institutional investors, the funds flooded back to the market and drove the stock prices up today.
Also, there was a piece of good news for the market: Li Rongrong, chairman of the State-owned Asset Supervision and Administration Commission, said yesterday at a central government work conference that the adjustment on State holdings in large listed State-owned companies should take investor’s interest as a top priority. In other words, the nation will not dump its holdings in these companies if there are chances that investors, smaller ones in particular, will be hurt by the consequences, industrial experts believe.
Link to this article：Blue chips bounce back, index up 2.18%
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