Chinese shares closed 0.33 percent higher on Wednesday despite the launch of initial public offerings (IPO) of four domestic companies renewing fears of a liquidity crisis.
The benchmark Shanghai Composite Index, which covers A and B shares listed on the Shanghai Stock Exchange, climbed 12.7 points, or 0.33 percent, to close at 3,865.72 points.
The component index of the smaller Shenzhen Stock Exchange was up 103.63 points or 0.82 percent, to 12,785.67 points.
The combined turnover of the two bourses, however, fell to 99 billion yuan (US$ 13 billion), the lowest level since the market entered its adjustment period at the end of May. The combined turnover was 159.7 billion yuan on Monday and 109.1 billion yuan on Tuesday.
Analysts say the continuous fall in turnover is mainly due to fears of a liquidity crunch and possible tightening of polices to rein in economic growth, as well as the absence of favorable news.
On Thursday, four companies will launch their IPOs, including the Bank of Nanjing, the Bank of Ningbo, the Sichuan Gaojin Food Co. Ltd. and Guangdong Ronsen Super Micro-wire Co. Ltd., which are expected to draw a total of 1.2 billion yuan.
Figures released on Tuesday showed China's trade surplus grew 83.1 percent to US$ 112.5 billion during the first six months, implying that the half-year GDP growth might exceed expectations and trigger stricter macro-control measures.
Heavyweight financial stocks continued their upward trend. The Industrial and Commercial Bank of China climbed 0.75 percent to close at 5.4 yuan, and the Bank of China was up 1.57 percent to 5.18 yuan.
China Merchants Bank dropped 1.15 percent to 27.48 yuan, following its 7.46 percent rise on Tuesday and 6.68 percent rise on Monday.
Sectors leading the rise included property, communications, coal and oil, but the property sector showed evidence of ebbing.
The Hushen 300 Index, which tracks 300 companies on the Shanghai and Shenzhen stock exchanges, closed at 3,789.87 points, up 0.38 percent.
(Xinhua News Agency July 11 2007)
