The Shanghai stock market rebounded in heavy trade yesterday, led by a nearly 8 percent jump in Ping An Insurance after shareholders approved its controversial plan for an equity issue that could raise some $17 billion.
Both the market and Ping An had been depressed since mid-January by the insurer's fundraising plan, as investors worried the market might not be able to absorb the huge issue and that other big firms might follow suit with cash calls.
Wednesday's shareholder approval had already been priced in to a large degree, so many investors saw little room for further falls in the market over the short term at least, and were willing to bet on a rebound, analysts said.
The Shanghai Composite Index ended up 1.59 percent at 4360.986 points, but it was well off its intra-day high of 4427.498.
Turnover in Shanghai A shares swelled to 132.8 billion yuan from Wednesday's 113.3 billion yuan.
"Maybe this is a sign that the overall market is bottoming out. People are now saying Ping An has dropped too much," said Chen Jinren, an analyst at Huatai Securities, who admitted he was surprised by the market's bounce.
But he and others said problems overhanging the market, including the prospect of big supplies of fresh equity this year and high inflation, had by no means disappeared, so it was unclear if Ping An or the market were starting extended recoveries.
Ping An soared its 10 percent daily limit at one stage before ending up 7.87 percent at 72.38 yuan, in the heaviest trade since it listed in Shanghai in March last year. The shares are down from 98.21 yuan in mid-January but up from their intra-day low of 65.01 yuan in late February.
Hang Seng recovers
Hong Kong stocks recovered from three-week lows yesterday, as investors took heart in buoyant global equities and bid up shares across the board.
Oil and mining shares outperformed, pacing gains in the commodities market while bourse operator Hong Kong Exchanges and Clearing Ltd gained after its annual earnings topped forecasts.
The benchmark Hang Seng Index ended up 1 percent at 23342.73. Turnover was low at HK$69.55 billion.
The China Enterprises Index of Hong Kong-listed mainland companies, or H shares, finished up 1.7 percent at 13065.89.
Source:China Daily/Agencies
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