China's stock market once again showed its immunity to global financial turmoil on Wednesday, rebounding from a fall to close mixed as other Asian bourses tumbled. The Shanghai Composite Index set an all-time high of 4,916.310 points in the first half-hour of trade, but then sank as much as 2.26 percent as a wave of profit-taking hit stocks.
The index rebounded in the afternoon, however, to close just 0.06 percent lower at 4,869.883 points as the real estate sector and banks in particular performed well. Losing Shanghai stocks outnumbered gainers by 547 to 335, while turnover in Shanghai A shares was a modest 130.0 billion yuan ($17.2 billion) against Tuesday's 126.5 billion.
Traders said the market's pull-back during the day was mainly due to increased profit-taking as the index neared 5,000 points, which has been seen as major resistance. Wednesday's high brought the index's gains so far this year to 84 percent.
Some analysts also said that after largely ignoring the US subprime mortgage crisis, some Chinese investors were starting to react to falls in foreign markets by taking money off the table, just in case the global credit squeeze did start to affect China.Daily openings of new accounts for investment in funds have started to exceed openings of individual A-share investment accounts this month - on Monday, the numbers were 204,053 and 169,965.
Banks helped support the index on Wednesday with Industrial & Commercial Bank of China, the most heavily weighted stock, up 0.57 percent to 7.09 yuan. Huaxia Bank climbed 8.86 percent to 17.82 yuan, bringing its gains since mid-July to 67 percent.
There is talk that several new mutual funds have been building positions in Huaxia Bank since the stock lagged other second-tier banks earlier this year. The property sector was strong after more news of big deals and financing in the sector. Industry leader Vanke rose 1.26 percent to 33.72 yuan.
CITIC Securities, China's biggest listed brokerage, dropped 1.72 percent to 81.06 yuan after jumping 8.51 percent on Tuesday. It said its net profit soared 442 percent.
China Southern Airlines surged 10 percent to 17.56 yuan after announcing it would buy assets totalled 269.5 million yuan from one of its shareholders. Hainan Airlines jumped to a high of 9.07 yuan after Reuters reported its parent plans to buy a controlling stake in Topwin Futures. The stock ended up 2.77 percent at 8.90 yuan. The Chinese market's rise boosted the average premium of A shares over Hong Kong-listed H shares from 75 percent to 80 percent, the highest level since an index tracking the premiums was launched in early July.
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