China's main stock index ended up 1.3 percent on Thursday on expectations of strong earnings for blue chip companies, shrugging off fears that new initial public offerings would overwhelm the market with fresh supply.
Western Mining Co Ltd, the most actively traded stock, more than doubled to 32.84 yuan on Thursday in its debut on the Shanghai market. It had opened 160 percent above its initial offering price of 13.48 yuan. City commercial lenders Bank of Nanjing and Bank of Ningbo are also making initial public equity offers set to raise a combined total of up to 11.07 billion yuan ($1.46 billion).
The Shanghai Composite Index rose to 3,915.991 points on Thursday, down from an intrude high of 3,925.604 but extending on Wednesday's 0.33 percent rise.
Analysts said investor confidence was recovering as many companies predict strong profits for the first half, despite state media reports on Thursday warning that the market would be "put to the test" as new IPOs come to market. "The IPO listings are only one of many factors that affect the market," said Zhang Yanking, analyst at Knighting Securities, adding that many investors had already digested much of this information on Wednesday.
Gaining Shanghai stocks outnumbered losers by 581 to 287. Turnover in Shanghai A shares was light at 68 billion yuan ($9 billion), up from Wednesday thin 61.6 billion yuan. Turnover eased in recent weeks as the market corrected after a rally to record highs in late May and amid concerns that policy moves could depress the market.
Large blue chips led the index up, with China Life Insurance providing the most support as it rose 4.5 percent to 46.17 yuan. Banks continued their recent strong performance, with many forecasting strong profits for the first half of 2007.
Minsheng Bank, the most actively traded bank stock, rose 2.52 percent to 12.22 yuan. China Petroleum & Chemical Corporation (Synoptic) climbed 5.19 percent to 13.37 yuan after the company said on Thursday that it expected its 2008 crude capacity to rise to 196 million tonnes from an earlier target of 187 million tonnes.