China A shares make strong comeback

SMALL investors launched a burst of bargain hunting yesterday to pull the mainland A-share markets out of what appeared a fatal crash dive which saw them lose 14 per cent in three days.

The Shanghai and Shenzhen Credit Lyonnais A indexes rose 8.35 per cent and 7.04 per cent respectively on healthy lifts in turnover.

A Shanghai-based broker said it was made clear yesterday that everyone had under-estimated the investment power and speculative character of A-share punters.

He said the Shanghai market moved down slightly on opening, and that was the signal for a bargain buying surge that lasted for the rest of the day.

As has been the case recently, Shenzhen followed closely in Shanghai's footsteps and also soon began to run up.

Brokers said an article in the China Securities newspaper reaffirming Beijing's so-called ''four no'' policy - no immediate listing of shares issued this year, no excessive rights issues, no stock transaction tax, and no listing of state and institutionally owned shares - boosted sentiment, even though there was nothing new in the report.