China's main stock index surged 1.54 percent in heavy trade on Wednesday, hitting a new all-time high, as yuan strength boosted the property sector and positive local media reports about the share market buoyed sentiment. The Shanghai Composite Index reached an intra-day high of 4,175.444 points before ending at 4,173.709, bringing its rise this year to 56 percent.
Gainers outnumbered losers by 704 to 133 with over 35 shares jumping their 10 percent daily limits. Turnover in Shanghai A shares was large at 213.0 billion yuan ($27.8 billion), though down from Tuesday's 223.6 billion yuan.
Zhou Lin, analyst at Huatai Securities, said investors continued to believe authorities would permit a continued uptrend in the market, and that any official attempts to cool it would not produce a big pull-back. On Wednesday, positive newspaper reports encouraged buying. The official China Securities Journal reported that from start of this year to May 21, around 1,083 A shares - 78 percent of the total in Shanghai and Shenzhen - had doubled.
Property shares were strong on appreciation of the yuan, which has accelerated before and during this week's Sino-US talks. Vanke was up 4.89 percent to 18.25 yuan after gaining 4.82 percent on Tuesday. Heavweight Bank of China surged 1.22 percent to 5.83 yuan, though most banks were sluggish. Many of the top gainers were smaller companies as Shandong Expressway, which rose 10 percent to 9.88 yuan after a shareholders meeting approved a 0.125 yuan per share dividend for 2006.
Harbin Air Conditioning shot up 10 percent to 16.10 yuan after saying it won a 988 million yuan contract. XinJiang Dushanzi Tianli Tech soared 7.12 percent to 13.09 yuan after placing 87 million new shares with 10 institutions at 5.80 yuan per share.
Baoji Titanium Industry climbed 1.79 percent to 42.69 yuan after saying it had signed a 15-year supply contract with Goodrich Corp of the United States. But foreign currency-denominated B shares tumbled, with the Shanghai B-share index dropping 5.03 percent after losing 6.89 percent on Tuesday.
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