[BEIJING] China's stocks rose for an eighth day, sending the Shanghai Composite Index toward the 5,000 level for the first time since 2008, as technology companies rallied on the prospect of increased government support.
BOE Technology Group Co and Shenzhen O-film Tech Co jumped more than 9 per cent. The Chinese government will draft a five-year development plan for Big Data and promote some leading companies in that area, China News Service reported Wednesday. Drug and consumer-staples shares also rallied, with Xizang Haisco Pharmaceutical Group Co and liquor maker Wuliangye Yibin Co adding more than 4 per cent.
The Shanghai Composite increased 0.4 per cent to 4,961.04 at 10:17 am local time, extending gains over the past eight days to 16 per cent. The index has surged 145 per cent in the past year, the most among 93 global indexes tracked by Bloomberg, on speculation the central bank will add to three interest cuts to spur growth and widen access to capital markets in the mainland.
"People are holding on to expectations that the market will continue to go up and that's why the bull trend seems to be intact," said Jimmy Zuo, a trader at Guosen Securities Co. in Shenzhen. "IPOs will increase supply but are not huge enough to stop the rally. Trading will be volatile as some participants will choose to take profits." Subscriptions for 23 initial public offerings including China National Nuclear Power Co. may lock up 4.9 trillion yuan (S$1.07 trillion) of liquidity starting early June, according to the median estimate of six analysts surveyed by Bloomberg.
Hong Kong's Hang Seng China Enterprises Index fell 0.9 per cent, while the Hang Seng Index dropped 0.9 per cent. The CSI 300 Index added 0.1 per cent.
Citic Securities Co led declines for financial companies after more brokerages raised their margin requirements for stock financing. Guosen Securities Co raised its margin requirement for stock financing on 908 stocks, the Securities Times reported, while Southwest Securities Co cut the amount of margin financing that investors could get using some securities as collateral.
PetroChina Co slid 2 per cent, halting a five-day, 9.7 per cent rally.