China's shares closed at their highest level in more than 30 months on Tuesday as investors piled into tourism stocks ahead of the annual May holidays when millions will take to the air and roads.
Investors ignored news of the Chinese parliament's ruling on Tuesday that it had the power to decide if political changes were needed in Hong Kong, stamping its authority over the territory.
The benchmark Shanghai composite index, grouping hard-currency B shares and yuan-denominated A shares, rose 0.62 percent to 1,777.516 points - its highest finish since September 25, 2001, when it ended at 1,793.884.
The index had fallen slightly in morning trade, as profit-taking emerged among steel and automobile chips.
"Bargain-hunting in tourism and other small caps helped offset a mild correction among blue chips," said analyst Zhang Yong at Shanghai Securities.
China United Travel Co Ltd was one of the day's top gainers, leaping 8.9 percent to 9.93 yuan, while Huangshan Tourism Development Co Ltd's B shares jumped 2.5 percent to $0.499.
The upcoming week-long May 1 Labour Day holiday is a peak season for domestic travel, prompting investors to focus on tourism shares.
Sentiment also brightened after blue chips recouped some of their losses in early trade, brokers said.
Heavyweight China United Telecommunications Corp Ltd was the most active stock, ending one percent higher at 4.58 yuan. It had shed 1.8 percent by the lunch break.
"Although some investors are locking in gains, huge fund flows are entering the market and helping keep the index firm," said Qian Weihai, an analyst with Jinxin Securities.
The Shanghai index has gained 19 percent since the start of 2004, buoyed by factors including a record number of mutual funds pouring money into booming sectors such as power and automobiles.
Comments
Comments are closed.