Chinese stocks rose on Thursday as several blue chips including Ping An Insurance continued rebounding from near the prices of their Hong Kong-listed H shares, which some investors consider support. But thin turnover showed investors remained very uncertain whether the market was finally bottoming, given concern about slowing economic growth and large supplies of fresh equity.
The Shanghai Composite Index tumbled as much as 2.29 percent in the opening minutes after Federal Reserve Chairman Ben Bernanke said the US economy might slip into recession. Investors expect a Chinese economic slowdown to follow.
But Chinese stocks soon came off their lows after the Hong Kong market opened firmer, and the Shanghai index closed up 2.94 percent at 3,446.244 points, off a high of 3,456.948. It remains 44 percent below last October's record peak.
Rising Shanghai stocks outnumbered losers by 707 to 188, but turnover in Shanghai A shares shrank to a two-week low of 66.2 billion yuan ($9.4 billion) from 86.2 billion yuan on Wednesday.
Ping An climbed 3.85 percent to 59.04 yuan in active trade, after hitting a two-week high of 59.20 yuan. It has been rising strongly since the premium of its A shares to its Hong Kong-listed H shares fell below 10 percent this week. The H shares were up 6.90 percent to HK$62.75 in late trade.
The A shares' technical outlook has improved greatly. Thursday's rise confirmed a break above a downtrend line from mid-January, when the company announced its controversial, multi-billion dollar fund-raising plan, and turnover on Wednesday was the highest since Ping An's Shanghai listing in March last year, a bullish sign in the context of a rebound.
The stock faces resistance around 65.00 yuan, which was support in the run-up to the early March shareholders' vote which approved the fund-raising plan. China Railway Construction, the most heavily traded stock, rose 3.92 percent to 10.86 yuan, regaining a premium to its H shares, which were down 0.68 percent to HK$11.64. On Wednesday, the premium briefly disappeared.
Some fund managers are now talking of a good chance of a market rebound in the second quarter of this year. "We believe that with valuations gradually entering a reasonable area, the chance of the market continuing a steep, one-way fall is not large," HSBC Jintrust said in a report.
Other gainers, PetroChina climbed 2.27 percent to 17.55 yuan, extending a bounce from its IPO price of 16.70 yuan, which it again hit in intra-day trade on Wednesday. China Merchants Energy Shipping, the country's biggest oil carrier, jumped its 10 percent daily limit to 7.77 yuan after estimating net profit in the first quarter of this year at least doubled from a year earlier.