Chinese stocks rebounded more than 2 percent on Thursday in response to signs that authorities were determined to support the market. The benchmark Shanghai Composite Index, which had slumped 4.13 percent the previous day, rose 2.17 percent to 3,656.839 points, led by steel and coal producers.
Rising stocks in Shanghai overwhelmed losers by 815 to 66, but turnover in Shanghai A shares shrank to 108.42 billion yuan ($15.49 billion) from Wednesday's 147.9 billion yuan. The China Securities Regulatory Commission is investigating two companies that had invested in Sichuan Hongda on suspicion they may have violated new restrictions on large sales of stocks after the expiry of lock-up periods, the China Securities Journal reported.
China has so far punished four firms for violating the restrictions, announced last month in an effort to halt a six-month slide in the market, the official People's Daily said. "The tougher stance by regulators clearly shows the government's determination to stabilise the market, and that could restore some confidence," said Chen Jijun, analyst at CITIC Securities.
Steel makers also rose on expectations that the metal's price would be increased to offset rising iron ore costs. Baoshan Iron & Steel, China's biggest steel maker, gained 3.01 percent to 13.34 yuan after tumbling 6.16 percent on Wednesday.
But China's major oil companies, which are subject to price restrictions in the domestic retail market, under-performed the market on concern that higher crude oil prices would widen their refining losses. Sinopec rose 0.32 percent to 12.55 yuan and PetroChina, the market's biggest stock, gained 0.33 percent to 18.00 yuan. Both stocks were lower during most of Thursday's session.
Property shares rebounded from the previous day's tumble but investors remained cautious over the sector's long-term prospects amid fresh signs that China's eight-year real estate boom may be coming to an end. Vanke, China's biggest listed developer, rose 2.08 percent to 23.02 yuan.
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