Chinese shares edge up on sharply higher volume

Chinese shares closed higher Thursday amid sharply stronger volume, lifted by buying of blue chips.

Total turnover was 257.83 billion yuan (34.8 billion U.S. dollars), against 201.38 billion yuan Wednesday. The rise in transactions was a sign of recovering investor confidence, according to traders at Huiyang Investment.

The benchmark Shanghai Composite Index climbed up 47.05 points, or 0.89 percent, to close at 5,319.86 points. The Shenzhen Component Index on the smaller Shenzhen Stock Exchange ended at 17,911.30 points, up 55.15 points, or 0.31 percent.

There was strong interest in steel stocks, with most reversing the losses of the previous trading day. Handan Iron and Steel soared 10.02 percent, up to the daily limit, to 9.22 yuan, and Ma'anshan Steel Ltd. rose 5.68 percent to 10.61 yuan. Baosteel, the country's largest steel conglomerate, went up 5.5 percent to 18.22 yuan, and Baotao Steel Ltd. gained 4.36 percent to 8.37 yuan.

Analysts said the robust steel sector supported nonferrous metal, coal and oil stocks.

Despite news of oil prices hitting 100 U.S. dollars per barrel on world markets for the first time, oil-related shares showed comparatively small movement. China's largest oil producer, PetroChina - which accounts for about 25 percent of the Shanghai stock index - was up only 1.64 percent to 31.08 yuan. Sinopec, the nation's biggest oil refiner, went up 2.46 percent to 23.78 yuan.

Olympics-related shares, which had a strong performance on Wednesday, continued their gains. Analysts said this trend was driven by investors' confidence about the 2008 event in China's capital.

China Quanjude, a roast duck restaurant founded more than 140 years ago that now has a chain of stores, rose by the 10 percent daily limit to 71.42 yuan, after a 9.99 percent surge on Wednesday.

Huabei Expressway, an expressway builder and operator, went up 8.76 percent to 9.68 yuan, Beixin Building Materials was up 1.47 percent at 13.8 yuan, and Yanjing Beer gained 1.81 percent to 23.58 yuan.

"To continue buying will be a wise choice these days as almost all sectors, except for finance and real estate, are on the rise," an analyst with Huiyang Investment said. Gains outnumbered losses by 668 to 169 in Shanghai and by 539 to 118 in Shenzhen.

The Hushen 300 Index, which accounts for 60 percent of the nation's stock market value, rose 36.93 points, or 0.69 percent, to 5,422.03.