Major indices break all-time high record
Updated: 2007-07-26 17:51
Major stock indices in the bourses of Shanghai and Shenzhen both topped their all-time highs on Thursday and consolidated gains amid rosy corporate earning prospect reports and continuing reminbi appreciation.
Continuing Wednesday's enthusiasm, the key Shanghai Composite Index broke the May 29 record of 4335.96 quickly with an exciting opening of 4347.78, 23 points higher than last day's close. In spite of a series of fluctuations due to investors' apprehensiveness and profit-taking funds, the index managed to close at historical 4346.46 high, with a slight increase of 0.52 percent.
The Shenzhen Component Index, however, did not break its record high by only a narrow margin in the morning session, saving strength for an afternoon charge. The index reached its peak of 14703 around 2 PM and ended at 14619.74, the highest close ever.
Shanghai Composite index
Shenzhen Component Index
Transaction value of the Shanghai and Shenzhen stock exchanges reached 134.4 billion yuan and 75.66 billion yuan respectively, expanding yesterday's figures but still far behind their record highs.
Robust corporate earnings served as the major driving force behind the bullish market. According to the interim report of 80 listed firms available now, their average profits surged a stunning 82.4 percent. Behind that is the booming Chinese economy as well as huge investment income from the flourishing stock market itself. Haitong Securities half year-profit, for example, expanded 853.15 percent from a year earlier mainly from the huge brokerage commissions and securities investment.
In addition, shares with lower trading prices, most of which suffered from a cruel 50-percent off in previous correction, began to revenge with one limit-up after another. Stocks of firms like Hainan Yedao and Greenview Property have surged 50 percent or more since early this month.
According to data from the exchanges, the total market value of Chinese mainland's stock market reached 19.13 trillion yuan after Wednesday's close and is expected to expand more with the inauguration of new index records today.
However, dealers are still cautious in the midst of the new highs. Some are worried that the forthcoming return of red-chip giants and regulators' persistent concerns about liquidity may prohibit the index from surging too far. They also advised investors to examine their portfolios carefully and prepare for more consolidation of the market taking on additional risks.
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