1970-01-01 08:33:27
Investors stare at the electronic board at an exchange in Jilin City in Northeast China's Jilin Province. Monday benchmark Shanghai Composite Index closed at 4213.36, 3.81 percent higher than last Friday's close. [newsphoto]
Contrary to most predictions, the weekend monetary tightening decisions cast little impact on the Chinese A-share market and pushed the index dramatically upward to a one-month high, symbolizing a major recovery of investor confidence after the month-long correction.
The bench mark Shanghai Composite Index continued Friday's bullish trend with a high open at 4,091.24. Led by strong performances of blue-chips like Sinopec and Baosteel, the index advanced past important markers at 4100 and 4200 points successively before closing at 4213.36, 3.81 percent higher than last Friday's close.
The Shenzhen Component Index, tracking the smaller Shenzhen Exchange, performed even better with a 5.38 percent gain and closed at 14139.27.
Transaction value expanded greatly for both markets. The bourse of Shanghai claimed 154.33 billion yuan worth of share trading, while the market of Shenzhen traded 76.46 billion yuan within the day. Both topped the month's record and sent an encouraging sign of more participation.
Performances of individual share performed even more strongly. Of all the shares listed in the two markets, more than 100 stocks sealed at their maximum rising cap. Only ten went lower in both markets. Stocks of banks and property sector continued their rally. Other sectors ranging from steel to paper-making and communication also revealed their attraction. Baosteel, China's leading steel maker, staged a maximum daily gain and closed at 12.07. Paper manufacturer Huatai, Communication giant China Unicom also performed well today.
However, shares of insurers like China Life and Ping'an Insurance made the loser list, probably due to worries that profit margins may not exceed the rising interest rates.
The State Council announced last Friday the year's third interest rate hike, which was accompanied by the central bank's decision to reduce the interest income tax from August 15. However, the moves had been widely anticipated among investors and fully absorbed via previous market correction. The confirmation from the government, therefore, has cleared the market of uncertainties and was received as positive news.
The recovery of the market is also a good sign for both brokers and the government. The Shanghai Securities News reported on Monday that total profits of the country's top 50 securities dealers surged by 411 percent year-on-year to 41.77 billion yuan in the past six months. Meanwhile, the nation's stamp tax income of stock trading went through a 13 fold increase to 3.18 billion yuan in June from a year earlier, mainly created by the hike of the stamp tax in May 30, according to sources from the tax regulators.
Analysts believed the rosy corporate profit prospects and abundant liquidity from the newly issued mutual funds would boost the market to a new high, but volatility was still unavoidable. Moreover, if the latest measures fail to cool the economy, investors' anticipation of further tightening may loom again.
Source:chinadaily.com.cn