Stocks hit 2-week high as confidence returns
Chinese mainland stocks rose to a two-week high as volatility slumped amid growing investor confidence State intervention has stabilized equities.
The Shanghai Composite Index climbed 0.9 percent to 3,647.93 points at the close, led by technology and gold companies. While price swings in the gauge have fallen to an eight-month low and thenumber of newinvestorsjumpedto a four-month high, turnover slumped with trading volumes 19 percent below the 30-day average onWednesday.
A sense of calm has returned to the stock market as authorities announced the resumption of initial public offerings, scrapped a rule requiring brokerages to hold net long positions and limited leveraged bets. The Shanghai gauge has rebounded 25 percent from its August low, after tumbling 43 percent from its June peak.
“The market has basically stabilized andweare not likely to see very wild swings as what happened during the stocks rout,” said Wang Zheng, the Shanghai-based chief investment officer at Jingxi Investment Management Co, who’s keeping his stock allocation unchanged at 80 percent. “We’ll see more market functions go back to normal in the future.”
In a market where daily fluctuations exceeding 3 percent were once the norm during a mid-year rout, this week’s moves of less than 1 percent in the Shanghai index have barely registered on price charts.