ZTE leads tech stocks as Chinese stock market rebounds
China telecoms giant ZTE saw its share price rise almost 10 per cent on Tuesday as the Shenzhen Stock Exchange rebounded from a market crash last week and a turbulent first day and half of trading this week.
ZTE closed at 21.65 yuan a share on Monday, down 21 per cent from last Wednesday, just before a spate of panic-selling set in.
The stock looked set to struggle along with the rest of the Chinese market on Tuesday before the situation settled down after lunch and it climbed by the daily cap.
Investor confidence was resown after China’s central bank implemented a 50 billion yuan (US$8.06 billion) cash injection and freed up the state pension fund to invest up to 1 trillion yuan in equity investments.
To further calm jitters and promote lending, the People’s Bank of China trimmed its one-year lending rate by 25 basis points over the weekend and loosened its deposit reserve ration for some commercial banks by 50 basis points.
Despite last week’s confidence crisis, Monday’s bear market and a downward spin since last June, the benchmark Shanghai Composite Index is still up about 25 per cent since the start of the year.
ZTE, which produces telecommunications equipment, is the parent of smartphone maker Nubia Technology. It is now expanding into wireless charging facilities for electric buses in China.