China stocks rebounded on Thursday, but investor confidence in the economy remained shaky, capping gains. The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 0.7 percent, to 3,285.00, while the Shanghai Composite Index gained 0.9 percent, to 3,142.69 points. Among the most active stocks in Shanghai were Huajing , down 3.1 percent to 9.46 yuan; Meiyan Jixiang , up 10.0 percent to 5.83 yuan and Jihua Group , up 9.0 percent to 13.10 yuan.
In Shenzhen, XCMG Machinery, down 3.8 percent to 4.61 yuan; Ductile Pipes, down 0.5 percent to 7.71 yuan and Yotrio Group, down 7.9 percent to 7.46 yuan were among the most actively traded. Total volume of A shares traded in Shanghai was 21.2 billion shares, while Shenzhen volume was 22.1 billion shares. Investors cease deleveraging Chinese stock investors stopped reducing their leveraged bets over the past week, with outstanding margin loans rising four times in five days, helped by signs of market stabilisation.
Three months after one of China's worst stock market slumps on record, investors are borrowing money again to speculate. The outstanding margin loans - money investors borrowed from brokerages to buy stocks - increased gradually over the past week to 938.6 billion yuan ($147.2 billion) compared with an overall decline in the past three weeks. More than half of suspected illegal margin lending accounts have been cleaned up by September 11, according to the China Securities Regulatory Commission (CSRC). But most investors remain cautious, with the number of new investors down 5.2 percent this week.
Another sign of still subdued trading interest is declining funds in Chinese stock accounts in September, although the pace slowed slightly with a 73.5 billion yuan outflow in the past week, smaller than previously. A poor economic outlook is also affecting sentiment. China's September flash PMI, which measures activity in the country's factory sector, unexpectedly shrank for the seventh month in a row to the lowest level in 6-1/2 years, a private survey showed on Wednesday.