Chinese main stock index swung wildly on Wednesday before ending up 1.09 percent, hitting a fresh all-time high for its eighth straight daily gain, as market turnover ballooned to its largest ever.
The Shanghai Composite Index rose more than 1 percent in early trade and then sank nearly 3 percent, before rebounding in the late afternoon. It closed at 3,173.018 points, off an intra-day high of 3,180.332.
Losing stocks outnumbered gainers by 633 to 230, as the index's gain was largely the result of rises in a small number of heavily weighted financials. Turnover in Shanghai A shares soared to 150.5 billion yuan ($19.5 billion) from 113.6 billion yuan on Tuesday. The previous record turnover was 128.0 billion yuan, hit on February 27 when the market plunged nearly 9 percent.
The massive turnover was caused by waves of profit-taking with the index up 19 percent from the start of this year, after a 130 percent leap last year. The market had already been talking about 3,200 points as psychological resistance so selling intensified when that level was approached in the morning. But newly created mutual funds then piled into financials at their lows.
Analysts said the high volatility and volume suggested the market might be peaking for the short term. But with new mutual funds still flush with money, few believe an extended downtrend is likely. Strong technical support is believed to lie at the January and February peaks around 3,000 points, which roughly coincide with a minor uptrend line from the early February low, now at 2,960 points. Industrial Bank was up 3.10 percent to 25.970 yuan after reporting 2006 net profit surged 54 percent, though the profit rise had been expected. Huaxia Bank shot up 7.82 percent to 11.31 yuan.
Blue chip Baosteel, due to report annual earnings at the end of this week, jumped 3.33 percent to 9.61 yuan. Shanghai International Port climbed 8.71 percent to 10.23 yuan after gaining 9.80 percent on Tuesday. Ship engine maker Hudong Heavy Machinery soared 6.08 percent to 77.16 yuan after it reported 2006 net profit nearly doubled.
BOE Technology Group, a maker of PC monitor components, surged its 10 percent daily limit to 5.48 yuan after saying it would sell 73.54 percent of a TFT-LCD production subsidiary to its parent and an investor. It had been suspended since March 9 pending the restructuring announcement.
The day's two new listings in Shenzhen performed better than expected. Rongxin Power Electronic shot up 175 percent from its IPO price to close at 51.90 yuan, exceeding analysts' expectations of a range of 37-45 yuan.
Zhejiang Tianma Bearing jumped 141 percent to 70.01 yuan, above predictions of 55-66 yuan. Poly Real Estate sank 1.60 percent to 54.64 yuan, while Daqin Railway lost 3.13 percent to 12.99 yuan. But no shares in Shanghai fell their 10 percent daily limits.