SHANGHAI (Reuters, AFP) - China shares soared on Wednesday, with the Shanghai Composite Index producing its biggest one-day percentage gain in more than five years as investor confidence continued to recover after Monday's plunge.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 4.5 per cent, to 3,548.88, while the Shanghai Composite Index climbed 4.7 per cent, to 3,323.61 points. That was its biggest one-day gain since October 2009. The financial sub-index leapt 6.5 per cent while the property sub-index surged 4.7 per cent.
On Monday, the Shanghai index had tumbled 7.70 per cent, its biggest fall since June 2008, after authorities moved to rein in risky margin trading business.
The Shanghai market started to recover Tuesday on better-than-expected economic growth figures and comments by the market regulator which denied that an ongoing crackdown on margin trading aimed to "suppress" a rally that sent the Shanghai market up more than 50 per cent in 2014.
"The driving force of the rally hasn't changed and there are buying opportunities after the market correction," BOC International analyst Shen Jun told AFP. "The economic figures released yesterday were not bad and they didn't seem to bring any unexpected negative news," he said.
China said Tuesday that the economy expanded 7.4 per cent last year, down from 7.7 per cent in 2013 and the weakest since 1990. But it beat the median forecast of 7.3 per cent in an AFP survey.
Haitong Securities hit its 10 per cent daily trading limit while CITIC Securities climbed 7.7 percent. Both stocks plummeted by the maximum daily limit of 10 per cent on Monday after falling foul of the regulators on Friday following investigations into margin trading.
Among the most active stocks in Shanghai were Bank of China , up 9.9 per cent to 4.89 yuan; CITIC, up 7.7 per cent to 28.75 yuan and Agricultural Bank of China , up 5.3 perc ent to 3.76 yuan.
In Shenzhen, Guosen Securities, up 4.0 per cent to 24.11 yuan; VANKE, up 5.7 per cent to 13.05 yuan and BOE Technology, up 2.9 per cent to 3.19 yuan were among the most actively traded.
Foreign investment flowing into Shanghai from Hong Kong through the mutual market access pilot programme took up 2.13 billion yuan of the 13 billion yuan daily quota.
Total volume of A shares traded in Shanghai was 41.0 billion shares, while Shenzhen volume was 21.1 billion shares.