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China shares close above 2,500 mark for first time; yuan steady against dollar

China shares close above 2,500 mark for first time; yuan steady against dollar

China's benchmark stock index closed above the 2,500 level for the first time Wednesday, as securities funds sought to push up large-capitalized companies for year-end window-dressing purposes.
The Shanghai Composite Index, which tracks both A and B shares, ended up 2.3 percent at 2,536.39. The Shenzhen Composite Index rose 1.1 percent to 545.58.
The yuan held its own against the dollar in what may signal a final spurt of appreciation before the end of the year.
On the over-the-counter market, the dollar was at 7.8200 yuan at around 0730 GMT, unchanged from Tuesday's close. It traded between 7.8195 and 7.8213 yuan.
Analysts said they expect the stock market to continue rising in the near term, as securities funds' interest in large caps will continue given their stable earnings outlook and heavy weighting in key indexes.
"Traders don't seem to be worried about profit-taking risks in large caps, as they'll soon be able to hedge those risks by going short on stock index futures," said Wu Ang, an analyst at CITIC Securities.
Shang Fulin, chairman of the China Securities Regulatory Commission, said in October that China plans to launch the derivatives early next year. The futures will be based on a unified index that comprises 300 large caps on both the Shanghai and Shenzhen stock exchanges.
Many funds sought to boost their holdings of large caps Wednesday to improve their end-year balance sheets. The mainland stock market will be shut between Jan. 1 and Jan. 3 for the New Year holidays.
Among large caps, China United Telecommunications surged by the 10 percent daily limit. It was also supported by renewed hopes China will issue third-generation mobile-phone licenses soon, analysts said.
Industrial & Commercial Bank of China continued its bullish run, rising 3.1 percent, while Bank of China advanced 2.1 percent.
ICBC has risen 19.8 percent so far this week, while BOC has gained 12.3 percent over the same period, benefiting from hopes China Life Insurance will make a strong market debut. The insurer is aiming to list in Shanghai by Jan. 11.
China Petroleum & Chemical's A shares closed higher after the company said it had received a government subsidy of 5 billion yuan to compensate it for low domestic oil-product prices.
The refiner rose 1.6 percent, extending Tuesday's 8.4 percent gain.
"The (subsidy) news may have already been leaked and been behind its jump yesterday," said Zhu Haibin, an analyst at Everbright Securities. "The upside for the stock is limited in the short term."


Updated : 2021-04-13 19:03 GMT+08:00