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China's main stock index enjoyed a bullish performance, allowing them to reach a new record high Wednesday as market analysts warned that vibrations would affect the equity market in the next few days. The benchmark Shanghai Composite Index closed at 3,057.38 points after a 0.83 percent, an all-time high while the Shenzhen Composite Index gained 1.36 percent to end the day at 805.68. Meanwhile, the Shanghai and Shenzhen 300 Index of major companies enjoyed a strong day 1.12 percent to level out at 2,702.59. A good performance by automobile shares contributed to the rise with, for example, the First Automobile Works surging 8.82 percent to 8.14 yuan with Chang'an Automobile seeing its stock shoot up 7.83 percent to 15.15 yuan. Jiangxi Copper used its daily 10 percent fluctuation limit to the fullest limit for the second day in a row, rising to 19.83 yuan after disclosing its plan to raise 4 billion yuan by purchasing assets from its parent company and tapping mining resources through a private share issue. Financial shares, however, did not feel the same level of success. On the positive side, Pudong Development Bank gained 4.55 percent to 26.17 yuan with Shenzhen Development Bank edging them slightly, climbing 5.02 percent to 19.89 yuan. However China Life, the country's biggest insurer dipped 0.72 percent to 34.16 yuan with major rival Pingan Insurance taking a hit with a 1.49 percent fall to 45.1. Although confidence remains high of the market's long-term buoyancy, the analysts still predicted the market to fluctuate in the following days. Shenyin Wanguo Securities staff warned that little room was left for further rise but that structural risks remained constant while Tiantong Securities added their approval, noting a structural adjustment would continue. Last month's Shanghai Composite Index fall remains seared into the minds of stockbrokers when the market hit a then record high 3,040.60 before crashing by close to 9 percent, the largest daily loss in a decade. Amidst maneuvers taken to let the stock market fever simmer down, China's listed firms were banned Tuesday from investing share sale profits in securities. The People's Bank of China, the central bank, announced a 0.27 percentage point interest rate rise at the weekend, but this did nothing to lower enthusiasm. The Shanghai Composite Index started the week with a three percent rise on Monday, with a further 0.59 percent rise on Tuesday. (China Daily March 22, 2007) |
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