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Regulatory Buzz Drives Up Markets by 7% |
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The Chinese stock markets snapped their extended losing streaks on Wednesday, both surging by more than 7%. The benchmark Shanghai Composite Index closed at 2,523.2, up 178.81, or 7.63%, its biggest 1-day gain since 24 April, when regulators cut the stock trading stamp tax from 0.3% to 0.1%. The Shenzhen Component Index finished at 8,531.15, up 567.58, or 7.13%.
Jiangxi Changhe Automobile, which had lost 0.14% by the closing bell, was the lone decliner on either bourse. Combined turnover zoomed by over 60% from the previous session to stand above RMB 85 bln, with over 300 stocks closing at their 10% intraday limit.
The market rallied on after-hours remarks from the China Insurance Regulatory Commission, which carries tremendous weight in its role as regulator of some of China's most important institutional investors, stating that it would always firmly support the development of the country's stock market. Brokerages collectively surged on rumors that the government may allow them to underwrite newly-unlocked shares in the future. In addition, a market report by JPMorganChase alleging that the Chinese government may issue an economic stimulus package to boost the slowing economy and rejuvenate the battered stock markets also lifted spirits.
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Chinese Stocks Up 1.06% on Low Turnover |
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The Chinese markets recovered slightly on Monday on the strength of rejuvenated banking and utilities stocks. The Shanghai Composite Index opened with a plunge to 2,297.25, then slid to its intraday low of 2,284.59 in the first hour of trading. The market rebounded in the afternoon led by heavyweights China Merchants Bank and PetroChina.
Shanghai ultimately added 1.06%, or 24.60 points, to close at 2,344.47. The Shenzhen Component Index closed at 7,963.57, up 130.48 points, or 1.67%. Aggregate turnover shriveled to just 30.5 bln yuan from 52.39 bln yuan a day earlier.
China Merchants Bank, China's most profitable lender, gained 3.21% to close at RMB 21.89 after posting 116% YOY growth in 1H net profit thanks to wider interest margins. The utilities were electrified when Zhang Baoguo, Director of the National Energy Administration, hinted yesterday that the country may raise prices for electricity after the curtains are drawn on the Beijing Olympics. Cheered by the news, Shanghai Electric Power and four other utilities had jumped by the 10% daily limit before the day was out. China South Locomotive & Rolling Stock Corp., which staged its brilliant debut yesterday despite the lackluster market, continued its rise to close higher by 7.25%.
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Cross-the-board Slump Sends Chinese Shares to 20-month Low |
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China's stock markets saw their Black Monday on 18 Aug. The collective slump of heavyweights lopped off 130.74 points, or 5.34% of the Shanghai Composite Index, which closed at a 20-month low of 2,319.87. The Shenzhen Component Index also dived by 4.86%, or 400.32 points, to close at 7,833.09.
Combined turnover of the two markets, though bulging from the previous session to over RMB 52.3 bln, was still low and reflected weak market sentiment. Decliners far outnumbered gainers at 1460 to 31 on the two bourses.
Among the top twenty heavyweights, Haitong Securities, and China Unicom finished at their minimum intraday limits, while China Life and Sinopec lost more than 6%. The food & beverage sector, the best industrial performer of the session, also lost nearly 5% amid the broad-based decline. Coal miners suffered another blow as the government said it would raise the coke export tariff rate from 25 percent to 40 percent as of August 20. China Shenhua, the country's top coal miner, tumbled over 5%. China South Locomotive & Rolling Stock Corp., China's biggest maker of trains, surged in its Shanghai trading debut up as much as 83% above its RMB 2.18 IPO price. It closed at RMB 3.45, up 58.26% higher than its IPO price.
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Chinese Stocks Up Slightly on Thin Turnover |
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Chinese stocks finally ended their week-long losing streak on Friday, edging up slightly on strengthening steelmakers and financials.
The Shanghai Composite Index crept up 13.53 points, or 0.56%, to close at 2,450.61, up marginally from an intraday low of 2,414.57. The Shenzhen Component Index gave up 45.24 points, or 0.55%, to close at 8,233.41. Combined turnover continued to shrink, generating less than RMB 43 bln, the lowest in 21 months.
Panzhihua New Steel & Vanadium Co. jumped by its 10% intraday maximum limit after reports that Anshan Iron & Steel Group, its larger rival, had bought a 5.09% stake in the company for RMB 1.07 bln. The USD 0.99 overnight retreat in oil futures succored the refiners. PetroChina, the country's biggest oil and natural gas producer, rose 1.99% to close at RMB 13.87. Sinopec, Asia's top refiner, gained 0.57% to close at RMB 10.66.
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Chinese Stocks Slide on Confirmed Slowdown |
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Chinese stocks finished lower on Thursday in the wake of a confirmed economic slowdown. The central government reported that growth in industrial output slowed in July to a 19-month low of 14.7% as a result of weakening export demand, rising costs for raw materials and the pre-Olympic shut-down of heavy industry.
The Shanghai Composite Index edged down 9.22 points, or 0.38%, to close at 2,437.08. The Shenzhen Component Index rose 29.01 points, or 0.35%, to stand at 8,287.58 by the closing bell. Aggregate turnover contracted by nearly 20% from the previous session to stay below RMB 45 bln.
Ping An Insurance, the country's No. 2 insurer, was alone among the Top 10 large-caps to finish higher. The overnight rally in oil futures sent coal stocks higher. After the government announced plans to cut taxes on smaller vehicles as of 1 Sep in support of energy efficiency policies, small car makers Tianjing FAW Xiali and Chongqing Changan saw their biggest gains in almost two weeks. |
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