China's main stock index rose 3.16 percent on Wednesday in active trade, led by banks and resource shares, with sentiment buoyed after Barack Obama won the US presidential race. The benchmark Shanghai Composite Index ended at 1,760.609 points, after touching a one-week high of 1,788.258. It slipped 0.76 percent to a 26-month closing low on Tuesday.
Asian share markets hit their highest in three weeks boosted by news of Obama's victory as it removed uncertainty about who would lead the world's largest economy.
Turnover in Shanghai A shares rose to one-week high of 37.4 billion yuan ($5.5 billion) from Tuesday's 23.7 billion. The index has shed 71 percent from its record high of 6,124 points hit on October 16, 2007. The market capitalisation of Shanghai A shares shrank to 9 trillion yuan on November 4 from 23 trillion yuan in October, and the average price earnings ratio has fallen to about 14 percent from a high of 71 percent then.
Analysts said that Obama's win might help stabilise overseas markets, soothe worries about the world economy and challenge the Chinese share market's next upside level of 1,800 points. "A stable overseas market and economy can help China to keep a fast pace of growth," said Chen Jinren, analyst at Huatai Securities.
Cao Xuefeng, analyst at Western Securities, agreed. "If overseas markets can remain stable after the US poll, the China stock index has limited room to drop as valuations have become more attractive," he said. But he emphasised it was too early to judge how the new US administration's policies would affect future trade relations and China's long-term economic prospects.
"We need to focus more on our own policy changes and real economy. The present financial crisis will not be changed suddenly because of a new leader," he added. The biggest stock in the index, PetroChina advanced 2.71 percent to 10.63 yuan.
Bank shares led the gains, with Industrial & Commercial Bank of China, the country's biggest bank, climbing 0.81 percent to 3.72 yuan. Merchants Bank surged 9.57 percent to 12.71 yuan. Property and coal shares bounced, with China Vanke Co, the country's largest property developer, gaining 5.45 percent to 5.80 yuan after losing 7.09 percent on Tuesday.
China Shenhua jumped 5.18 percent to 18.07 yuan after slipping 4.82 percent on Tuesday. Chinese machinery maker Sany Heavy Industry soared 6.29 percent to 12.00 yuan after saying it plans to issue 1.98 billion yuan ($290 million) worth of shares in a private placement to acquire its parent's excavator business. However, some analysts remained cautious about whether the rally could go further.
Haitong Securities lost 6.76 percent to 13.93 yuan after falling by its 10 percent limit for a second straight day on Tuesday. The lock-up of nearly 1.3 billion of its shares, will expire in mid-November, local media reported.
The official Shanghai Securities News reported that brokerage commissions for stock trading are forecast to fall more than 20 percent in 2009 from this year as an expected slump in trading volume, a research note issued by Guotai& Junan Securities said.
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