Monday, 13 July 2015 11:10
SHANGHAI: Chinese stocks were up strongly in early afternoon trading on Monday, despite weak trade data, supported by government moves last week to avert a market crash, dealers said.
The benchmark Shanghai Composite Index jumped 2.79 percent, or 108.20 points, to 3,986.00.
The Shenzhen Composite Index, which tracks stocks on China’s second exchange, added 4.15 percent, or 84.45 points, to 2,119.71.
Government moves to slow a market rout include a police crackdown on short-selling and a ban on big shareholders — those holding at least five percent stakes — and company executives from selling stock for six months.
“Bargain hunters are focusing on small caps that were hit the most during the market rout,” Dai Ming, a fund manager at Hengsheng Asset Management Co., told Bloomberg News.
Analysts said trade figures announced by the government on Monday had little impact on the stock market.
China’s total trade slumped in the first half of this year, customs data showed, falling well short of the government’s targets and dealing a blow to the global economy from its biggest trader in goods.
More than a thousand listed companies remained suspended from trading on mainland exchanges Monday, Bloomberg reported — several hundred fewer than at the end of last week. Trading suspensions tend to slow market activity and defer risk until later.
“The market is stronger now as sentiment has reversed. Some of the stocks that halted trading last week are playing catching up for the rebound after the government’s support measures,” Zheshang Securities analyst Zhang Yanbing told AFP.
Government intervention came after the Shanghai index plunged 30 percent in three weeks, wiping trillions of dollars from market capitalisation, spreading contagion in regional markets, and raising fears over the potential impact to the real economy.
The market had risen 150 percent in the 12 months to its peak in mid-June, fuelled by tens of millions of retail investors using borrowed funds.
