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A trader reacts as he checks share
prices. The benchmark Shanghai Composite Index, which tracks both A- and
B-shares, surged 3.94 percent, or 109 points to closed at 2,881.07 points
Wednesday. The component index of the smaller Shenzhen Stock Exchange
jumped 3.19 percent, or 248 points, to end at 8,039.70 points. Turnover on
the two bourses totaled 136.08 billion yuan (17.01 billion U.S. dollars)
Wednesday. (Xinhua Photo)
Photo
Gallery>>> |
BEIJING,
March 1 -- China's stock market, after experiencing its sharpest daily fall
in 10 years, saw a rebound of nearly 4 percent yesterday as the government
allayed fears of a new capital gains tax.
The Shanghai Composite Index, which plummeted 8.84
percent on Tuesday, closed 3.94 percent higher at 2,881.073 in heavy trade.
"Tuesday's move was profit-taking, not a fundamental
shift in sentiment," said Stephen Green, senior economist at Standard Chartered
Bank in Shanghai.
Meanwhile, officials at the finance ministry and the
tax bureau said the government would not impose a capital gains tax on stock
investments. The rumor was the catalyst for the big drop on Tuesday, analysts
said.
Premier Wen Jiabao said yesterday the government
would protect the safety and stability of financial markets, according to the
Xinhua News Agency.
As China's major stock index recovered about half of
Tuesday's losses, the rest of Asia fell yesterday.
"Tuesday suggested to some that China's stock market
and the world's are now fundamentally linked; today's action pours cold water on
that theory," Green said.
Although most analysts and economists are optimistic
about the long-term performance of China's stock market, some analysts are
forecasting more corrections.
"We see another 15 to 20 percent correction of the
A-share index as is necessary and healthy," said Ma Jun, chief economist with
Deutsche Bank (Greater China).
Dong Chen, a senior analyst with CITIC China
Securities, said there will be more sharp ups and downs in the market this year,
and investors had better fasten their seatbelts.
He added Ping An's performance today would have
limited impact on the market.
The country's second-largest insurer will make its
debut on the Shanghai bourse today, raising 38.87 billion yuan with an initial
offer price of 33.8 yuan apiece. It is the second mainland insurer to list after
China Life.
"If Ping An shares open lower than 45 yuan, it will
still have enough growth potential, and could help lead upward momentum in the
financial sector," Dong told China Daily. "But if the debut price is above 52
yuan, there may be more downward pressure, and it's likely to trigger a slide in
financial shares."
The insurer said it would issue about 1.15 billion
yuan-denominated A shares, accounting for 15.66 percent of the insurer's
expanded stock of 7.345 billion shares.
(Source: China Daily)
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A trader reacts as he checks share
prices. The benchmark Shanghai Composite Index, which tracks both A- and
B-shares, surged 3.94 percent, or 109 points to closed at 2,881.07 points
Wednesday. The component index of the smaller Shenzhen Stock Exchange
jumped 3.19 percent, or 248 points, to end at 8,039.70 points. Turnover on
the two bourses totaled 136.08 billion yuan (17.01 billion U.S. dollars)
Wednesday. (Xinhua Photo)
Photo
Gallery>>> |
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