Chinese shares finished at a 12-month high on Wednesday as institutional investors chased blue chip steel makers on hopes of growing demand, dealers said. The Shanghai Composite Index, which covers A and B shares, gained 29.60 points, or 1.02 percent, to 2,922.30 on turnover of 146.6 billion yuan (21.5 billion dollars). It was the key index's highest close since June 18, 2008, when it ended at 2,941.11.
It has gained more than 10 percent this month. Steel makers led the market's rise on expectations that demand could be boosted by a future economic recovery, traders said. "Fund managers are buying heavyweight steel companies because of the sector's relatively cheap price and to window-dress their first-half earnings results," Guotai Junan Securities analyst Zhang Xiuqi told Dow Jones Newswires.
Bengang Steel Plates surged by the 10 percent daily limit to 7.48 yuan on reports that China discovered an iron ore mine with estimated reserves of three billion tonnes of ore in north-east Liaoning province, where the firm is located. Heavyweight banks bucked the uptrend on profit-taking and a report in the official Shanghai Securities News that China's banking regulator has urged lenders to tighten supervision of loans.
Industrial and Commercial Bank of China fell 1.1 percent to 5.36 yuan after rising 16 percent in the past seven sessions. China Construction Bank dropped 1.5 percent to 6.07 after rising more than 20 percent over the same period. The Shanghai A-share index gained 31.08 points, or 1.02 percent, to close at 3,067.90 on turnover of 146.3 billion yuan, while the Shenzhen A-share index rose 18.19 points, or 1.85 percent, to 1,002.16 on turnover of 70.8 billion yuan. The Shanghai B-share index gained 1.84 points, or 1.01 percent, to 184.54, while the Shenzhen B-share index rose 5.69 points, or 1.20 percent, to close at 478.50.