Chinese stocks jump

Chinese main stock index surged more than 1 percent to a fresh record high on Thursday, led by soaring airline stocks. But turnover shrank as IPOs diverted money from the market. The Shanghai Composite Index ended at 5,470.065 points, after hitting a new all-time high of 5,482.425. Gaining Shanghai stocks outnumbered losers by 567 to 284.
Turnover in Shanghai A shares shrank to a one-month low of 142.0 billion yuan ($18.9 billion) from Wednesday's 148.9 billion, as investors allocated money to the IPO of China Oilfield Services, for which retail subscriptions were taken on Thursday, and the record offer by Shenhua Energy, which will take subscriptions on Monday and Tuesday.
"There are continuous injections of new funds into the stock market, which shows how optimistic people are," said analyst Zheng Weigang at Shanghai Securities. Others, however, said concern about inflation and tightening monetary policy, as well as the large supply of new shares from initial public offers, might still keep the index below 5,500 points through the end of this month. Newly created mutual funds piled into the airline sector as the companies' Hong Kong-listed H shares rocketed.
China Eastern Airlines soared its 10 percent daily limit to 21.77 yuan as its H shares jumped 20 percent. Air China surged the 10 percent limit to 27.49 yuan as its H shares rose 11 percent. Bank of Beijing, which soared 81 percent in Wednesday's debut, rose a further 8.33 percent on Thursday to 24.57 yuan. This helped other banking shares stabilise after losses on Wednesday.
Insurers continued rising sharply on the view that higher interest rates would boost their returns on assets. China Life, which gained 2.37 percent on Wednesday, jumped 3.16 percent to 57.84 yuan.
Dairy shares gained after the government announced plans to provide subsidies to dairy farmers in order to develop the sector. Bright Dairy soared 10 percent to 14.73 yuan. Telecom equipment maker ZTE climbed 1.42 percent to 53.65 yuan after saying it had won a contract worth about $478 million to provide services and sell devices to a telecom operator in Ethiopia.
Oil refiner Sinopec, which had jumped 7.44 percent on Wednesday amid rumours that it might receive an asset injection from state shareholders or buy into a big government energy project, fell 1.56 percent to 17.62 yuan as turnover shrank back to normal levels. Sinopec officials told Reuters that they might issue a clarification of the rumours on Thursday or Friday.