Shanghai Composite Surpasses 4,000 as More Shares Resume Trading

Chinese stocks rose a third day, sending the Shanghai Composite Index past the 4,000 level, as technology shares rallied and more companies resumed trading after being halted during a recent rout.

The Shanghai Composite gained 1.1 percent to 4,001.05 at 10:18 a.m., heading for the first close above that level since July 1. The ChiNext index of small-company shares jumped 3.8 percent. PetroChina Co. slid 1.9 percent. A total of 633 companies were suspended from trading just after the open on mainland exchanges Monday, or 22 percent of total listings, down from 635 at the close Friday.

Volatility is increasing as companies start trading again and the government boosts measures to support the stock market after an almost $ 4 trillion rout. China Securities Finance Corp. can access as much as 3 trillion yuan ($ 483 billion) of borrowed funds from sources including the central bank and commercial lenders, people familiar with the matter said Friday.

The Shanghai Composite posted a 2.1 percent gain last week. The benchmark gauge has rebounded 13 percent from July 8 through July 17 after tumbling 32 percent in a month as investors unwound margin-debt positions. Margin traders increased holdings of shares purchased with borrowed money for the first time in three days on Friday, with the outstanding balance of margin debt on the Shanghai Stock Exchange rising by 0.3 percent to 921.3 billion yuan.

Source :: Bloomberg

MARKET

Shanghai Composite Flirts With 4,000 as Hong Kong Equities Surge

China’s Shanghai Composite Index briefly surpassed 4,000 for the first time since 2008, extending the world’s biggest stock-market rally as investors bet authorities will increase monetary stimulus to bolster economic growth.

The benchmark equity gauge surged to as high as 4,000.22 before paring gains to close 0.8 percent higher at 3,994.81. The index has doubled since January 2014 as traders borrowed a record amount of money to buy shares, new investors opened stock accounts at an unprecedented pace and government officials endorsed the rally. A gauge of Chinese shares in Hong Kong jumped 5.8 percent for the steepest gain since December 2011.

China’s central bank has cut interest rates twice since November and analysts predict authorities will ease policy further to keep economic growth above their 7 percent target. The nation’s individual investors, who account for about 80 percent of equity trading, may view the 4,000 milestone as a signal to boost holdings, according to Shenwan Hongyuan Group Co., the nation’s second-largest brokerage by market value.

While the market’s rapid ascent has fueled concerns of a bubble, Shenwan Hongyuan estimates the Shanghai index may rise to 4,500 as individuals shift more of their assets into equities. The gauge is still well below its all-time high of 6,092.06 in October 2007.

Source : Bloomberg

MARKET