China: Stocks recover further from plunge, led by finance and property shares

[SHANGHAI] China stocks climbed on Wednesday morning, led up by finance and real estate shares as investors regained more footing and confidence after Monday's plunge.

The CSI300 index rose 2.3 per cent, to 3,474.08 points at the end of the morning session, while the Shanghai Composite Index gained 2.2 per cent, to 3,243.87 points.

On Monday, both indexes tumbled 7.7 per cent - their biggest losses since June 2008 - on fears that steps by authorities to contain margin trading were meant to halt a recent rally.

That night, the Chinese regulator denied speculation on t had intentionally sought to suppress the rally. "I think market sentiment has settled," said Cao Xuefeng, head of research at Huaxi Securities. "Monday night's announcement was aimed at not allowing market sentiment to crash out of control." Cao said Monday's events were a bit like a parent hitting a child, who then threatens to jump off a balcony "so then the parent has to convince the kid not to jump".

On Wednesday, the property sub index leapt 4.3 per cent while the financial sub index gained 2.8 per cent.

Haitong Securities surged 4.4 per cent and CITIC Securities climbed 1.6 per cent.Both stocks plummeted the maximum daily limit of 10 per cent on Monday after falling foul of the regulators on Friday following investigations into margin trading.

Profits of China's 120 brokers surged 119 per cent in 2014 as booming stock markets sparked a spike in new clients and trading activity, according to figures released on Wednesday by the Securities Association of China (SAC).

China CSI300 stock index futures for February rose 2.6 per cent, to 3,494.4, 20.32 points above the current value of the underlying index.

In Hong Kong, stock indices continued to mirror the direction of mainland shares. The Hang Seng index added 1.3 per cent, to 24,261.71 points.

The Hong Kong China Enterprises Index gained 1.7 per cent, to 11,936.77.

The index measuring price differences between dual-listed companies in Shanghai and Hong Kong stood at 126.44.

A value above 100 indicates Shanghai shares are pricing at a premium to shares in the same company trading in Hong Kong.

Total volume of A shares traded in Shanghai was 20.26 billion shares, while Shenzhen volume was 11.88 billion shares.

Total trading volume of companies included in the HSI index was 0.7 billion shares.

REUTERS