Chinese shares edged up 0.07 percent on Wednesday as expectations that funds locked up by Daqin Railway's initial public offer will soon return to the market, helping to offset the outflow from some poor earnings reports.
The benchmark Shanghai composite index closed at 1,686.654 points. Turnover in Shanghai A-shares fell to a thin 17.5 billion yuan ($2.2 billion) from Tuesday's 19.4 billion yuan.
Shares of China's third-largest steel maker, Wuhan Iron and Steel Co, closed up 0.76 percent at 2.66 yuan on Wednesday as it became one of the first major companies to report first-half earnings. Its 58 percent net profit drop was expected and that affected the market reaction.
But the stock is still down 1.8 percent since the start of year to sharply underperform the market's 45 jump during the period, hit by investor worries over its earnings amid falling steel prices and rising raw materials costs. "Wuhan Steel stabilised because its earnings drop had long been expected and had been factored into its share prices," said Xu Yinghui, analyst at Guotai Junan Securities.
Xue saw the short-term support for the Shanghai index at 1,600 points, and strong resistance at 1,700 points, near the market's 27-month highs hit in early July.
China's largest steel maker, Baoshan Iron and Steel Co Ltd, finished up 2.44 percent at 4.2 yuan. On the positive side, 553.8 billion yuan poured into the subscription of Daqin Railway's IPO last week, leaving its retail portion 70 times oversubscribed, media reports said. The excess money is expected to be freed up on Thursday.
Bank of China, the largest offer so far on China's domestic market, has fallen nearly 14 percent since its Shanghai debut on July 5. The country's second largest lender ended 0.58 percent lower at 3.45 yuan on Wednesday, after it hit a new post-listing low at 3.43 yuan in intraday trading.
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