Markets in China rebounded yesterday on expectations vice-premier Zhu Rongji had ended his purge of those involved in irregular share practices after Thursday's decision to punish seven companies and their senior executives.
The Shanghai and Shenzhen exchanges plunged on opening but quickly recovered lost ground to end higher as investors moved to buy bargain stocks.
The Shanghai A-share index closed 2.61 per cent higher at 1,298.92 points, after falling 5 per cent when trading opened. The B-share index rose 1.22 per cent to 83.93 points.
Combined turnover was 5.6 billion yuan (about HK$5.19 billion).
In Shenzhen, the A-share index rose 4.4 per cent to 431.08 points, recovering from the 5.6 per cent fall at the morning opening bell. The B-share index gained 1.97 per cent to 146.15 points. Turnover of the two classes of shares was 7.36 billion yuan.
China Everbright Securities official Li Peixian said: 'Investors are relieved after all the market dampening news. Market sentiment is very bullish.' Analysts said the move to punish four brokerages, two banks and a listed company for trading violations capped months of anti-speculation action initiated by Mr Zhu.
