Monday, March 31, 2008

Chinese stocks book a strong rebound on Fri

Chinese stocks staged a strong technical rebound on Friday, closing 4.94% higher to end a two-day losing streak on support of heavy weight stocks.

The benchmark Shanghai Composite Index, which covers both A shares and B shares on the Shanghai Stock Exchange, jumped 4.94% or 168.65 to 3,580.15 points after fluctuating between 3,590.75 and 3,357.23 points, rebounding from a big loss of 5.42% Thursday.

Similarly, the Shenzhen Component Index on the smaller Shenzhen Stock Exchange moved up 4.43% or 581.43 points to 13,692.85 points.

The combined turnover on the two bourses climbed a bit to RMB 130.9 billion from RMB 112.02 billion of the previous trading day.

The rally came on market talk that the securities regulator may cut the stamp duty to 0.2% or unveil the timetable for the launch of stock index futures over the weekend to stem further declines, analysts said.

Heavy weights made a joint rally. PetroChina<601857><857>, the biggest index component, rebounded 5.18% to RMB 17.87, after hitting the intra-day low of RMB 16.7, its IPO price. It was still more than 63% off its record high of RMB 48.62, set on its Nov. 5 debut. China Petroleum and Chemical Corp (Sinopec)<600028><386>, the biggest refiner, added 5.18% to RMB 11.97, still 59% off its all time high on Nov. 5. Industrial and Commercial Bank of China<601398><1398>, the country's largest lender, rose 7.84% to RMB 6.05. China Life<601628><2628>, the nation's biggest life insurer, was up 9.92% to RMB 29.36 and its smaller rival Ping An Insurance<601318><2318> was up 8.47% to RMB 53.14. Ping An was 64% off from its record high in late October.

Elsewhere, China Pacific Insurance<601601>, the third-largest life insurer, rose 6.49% to RMB 27.57. It plunged 8.11% to break its IPO price of RMB 30 on Wednesday, when 300 million shares became tradable after a lock-up period expired. China Vanke<000002><200002>, the largest listed developer, rose 8.11% to RMB 26.66.

As a whole, winners outweighed losers by 750 to 79 in Shanghai and 587 to 74 in Shenzhen.

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