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Business / Markets

Equities bounce back on signs of stability

By WU YIYAO (China Daily) Updated: 2015-07-30 07:47

Equities bounce back on signs of stability

Investors monitor share prices at a brokerage in Haikou, Hainan province, during the morning session on Wednesday. The benchmark index gained 3.44 percent to 3,789.17 points after declining more than 8 percent on Monday. [Photo/China Daily]

Share prices rebounded on Wednesday following the government's latest efforts to restore market stability, with the benchmark Shanghai Composite Index edging up by 3.44 percent to close at 3,789.17 points.

According to analysts, the first rally in the past four trading days had managed to stem the nearly 11 percent slide since Friday. Though sentiment has been recovering, they still expect some fluctuations due to profit-taking in the next few days.

Share prices of more than 90 percent of the companies across all sectors listed in the Shanghai and Shenzhen bourses rose on Wednesday, among which 400 rose by 10 percent, the maximum daily gain.

Indexes of industrial, technology, telecommunications and shipping firms in the CSI 300 rose by more than 5 percent, the largest gains among the 10 industry groups tracked.

Analysts said that Wednesday's performance shows that investors are getting more rational, prudent, and sentiment has turned positive after the wild swings since mid-June.

The sliding turnover also shows that many investors are waiting for a better opportunity to adjust their portfolios. Unlike the panicky investors who flocked to sell off when market slid for several consecutive days, many investors, especially smaller ones, are more patient and confident about the trends, said a research report from Minsheng Securities Co Ltd.

Suspension of trading, banning major shareholders from share sales and probes into "malicious short selling" and "mass sell-offs" were also responsible for the slump in turnover during the past few weeks.

"Recent measures including cutting transaction fees and probing sell-offs have helped restore market confidence, and Wednesday's trends are an indication that these measures are working," said a research report from Guangzhou-based Wan Long Securities Consultancy Firm.

State-owned AVIC Capital Co Ltd, meanwhile, said that Yang Shengjun, its general manager, has been removed from his post after securities regulators investigated its subsidiaries over share sales. The company also posted a statement on its official website saying that it will do internal checks over the sales. The parent company of AVIC Capital had vowed earlier to repurchase shares and said it would not sell its holdings amid market fluctuations.

The Central Commission for Discipline Inspection said in a statement that the China Securities Regulatory Commission will improve its human resources work including making changes to staff rotation system in a bid to combat conflict of interest and reduce corruption.

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