Chinese share prices edged up 0.70 percent on Wednesday, bouncing off early lows led by market heavyweights, dealers said. Food and beverage producers rebounded in late afternoon led by liquor maker Kweichow Moutai and Yantai Changyu Pioneer Wine after they filed notices denying media reports that their products contain cancer-causing materials.
Kweichow Moutai was up 5.1 percent at 126.48 yuan, while Changyu Pioneer Wine rose 0.6 percent to 49.50 yuan. VV Food and Beverage rose by the 10 percent daily limit to 4.97 yuan.
"The market may extend the gains a bit tomorrow but it will stay volatile in the near term because of uncertainties facing the global and domestic economies," Huatai Securities' Chen Huiqin told Dow Jones Newswires. The benchmark Shanghai Composite Index, which covers A and B shares, was up 15.30 points at 2,216.81 on turnover of 49.0 billion yuan (7.2 billion dollars).
China United Telecommunications jumped 7.7 percent to 5.30 yuan. China Coal Energy Company was up 2.3 percent to 11.48 yuan after its parent company bought 4.05 million of the company's Shanghai-listed shares. Banks remained weak as investors took cues from the US where the massive government bank bailout faced opposition in Congress, dealers said.
Meanwhile, moves by China's domestic sovereign wealth fund Central Huijin to increase its stake in three state-owned banks failed to boost sentiment because the fund's purchases were too small, traders said.
"There are still worries over the fate of the US government's proposed 700 billion dollar rescue plan while people are also asking what more Beijing can do to bail out its own stock market," TX Investment's Wu Feng said. Industrial and Commercial Bank of China was down 1.4 percent at 4.29 yuan, while Bank of China was off 1.1 percent at 3.64 yuan.
The Shanghai A-share index added 15.95 points, or 0.69 percent, to 2,328.15 points on turnover of 48.9 billion yuan, while the Shenzhen A-share index jumped 5.41 points, or 0.88 percent, to 619.07 on turnover of 18.4 billion yuan. The yuan closed the day at 6.8237 against the US dollar, down from Tuesday's finish of 6.8135. The Shanghai B-share Index closed up 2.70 points, or 2.18 percent, to 126.77, while the Shenzhen B-share Index shed 1.56 points, or 0.53 percent, to 294.95.