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Mainland equities surge, even as offshore yuan hits new low

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2016-01-07 09:01Global Times Editor: Li Yan

China's blue-chip shares were sharply higher on Wednesday after State media said a selling ban on major shareholders brought in to help arrest a market crash last summer would remain in place until the government publishes new rules on such disposals.

The ban was set to expire at the end of this week, but after markets crashed 7 percent on Monday, the China Securities Regulatory Commission said it would implement a new policy to manage the pace of stakeholder sales, without specifying when the new policy would be implemented.

The benchmark Shanghai Composite Index surged 2.25 percent to 3,361.84 points, while the Shenzhen Component Index finished the day up 2.24 percent at 11,724.88 points.

The CSI 300 Index of the biggest companies traded in Shanghai and Shenzhen jumped 1.75 percent to 3,539.81 points.

The ChiNext Index, which tracks the country's NASDAQ-style board for growth enterprises rose 2.14 percent to 2,468.37 points.

A total of 698.7 billion yuan ($106.62 billion) in shares changed hands on the Shanghai and Shenzhen exchanges.

Most sectors surged on Wednesday, with iron and steel, coal and the nonferrous metals sectors outperforming the market.

Shen Weizheng, fund manager at Shanghai-based Ivy Capital, said extending share sale restrictions would prolong the bearishness sentiment in the market.

"It's like the sword of the Damocles, always hanging over your head. The best way is to remove restrictions altogether," Shen said.

The yuan's weakness, renewed volatility in the Chinese stock markets and a slowing economy have put China's policymaking at the forefront of global market risks at the start of 2016, along with the pace of expected increases in U.S. interest rates.

  

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