Chinese shares on Thursday closed up 1.56 percent at a near 11-month high, led by heavyweight banks and oil majors on speculation that Beijing may step in to lend support, dealers said. The Shanghai Composite Index, which covers A and B shares, was up 43.78 points to 2,853.90 on turnover of 147.3 billion yuan (21.6 billion dollars).
The key index achieved its highest close since July 29, when it settled at 2,903.01. "Judging from the rotational rallies among various sectors in recent sessions, there are very likely funds with government background in the market," Southwest Securities analyst Zhang Gang told Dow Jones Newswires. "The purpose is clearly to prop up the market ahead of the pending resumption of initial public offerings and soothe concerns about new share supply dragging the market lower," Zhang added.
The State Council's comments Wednesday that it would further encourage consumption and private investments also boosted investor confidence, traders said. Banks and refiners, mostly index heavyweights, were among the day's best performers. China Construction Bank ended up 5.2 percent at 5.87 yuan and China Merchants Bank rose 3.4 percent to 22.23 yuan. Refineries rose partly on an overnight rise in crude oil prices.
China Petroleum and Chemical was up 3.1 percent at 10.41 yuan and PetroChina rose 1.2 percent to 14.04 yuan. Chinese companies focusing on vaccine production surged due to rising demand from the spreading swing flu. Shenzhen Neptunus Bioengineering rose by the ten percent daily limit to 9.94. Guilin Layn Natural Ingredients also jumped 10 percent to 35.04 yuan.
The Shanghai A-share index rose 46.12 points, or 1.56 percent, to close at 2,995.83 on turnover of 146.9 billion yuan, while the Shenzhen A-share index gained 8.40 points, or 0.86 percent, to 988.69 on turnover of 73.8 billion yuan. The Shanghai B-share index was up 0.35 points, or 0.19 percent, to 184.27, while the Shenzhen B-share index lost 0.86 points, or 0.18 percent, to close at 464.50.
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