Bullish sentiment swept mainland markets yesterday, lifting prices to the biggest single-day rise since December.
Analysts said the rise - seen against the generally sharp price slide since May 12 - would not alarm Beijing authorities as the increase was nowhere near the recent worrying record levels, and turnover was modest.
Song Huaisong, analyst at Shanghai City United Bank, said: 'The rise was a technical rebound, fuelled by the spectacular jump in Shenzhen Development Bank. Seen in the light of falls of the past few weeks, it should not alarm the authorities.' Shares of Shenzhen Development Bank rose to their 10 per cent daily limit on the first day of trading after five days of suspension on the Shenzhen Stock Exchange as the dust settled on the purge of the trading irregularities on the bank.
China's only banking counter jumped 33.96 yuan within an hour of hectic trading yesterday.
The company has a big influence on the Shenzhen constituents index, accounting for about 40 per cent of the newly compiled index.
Stock analyst Wang Dazhou said: 'The company issued a public announcement on Wednesday and that cleared things up and boosted confidence greatly.' Rumours the company would revise its generous payout proposal have proved untrue, he added.