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Benjamin Robertson

Chinese shares surged to finish over 2 per cent higher each on Thursday in modest turnover while Hong Kong script edge up in lethargic fashion as equity markets tried to find their footing before the end of the week.
The Shanghai Composite rose 2.44 per cent to finish at 4,124.39. The CSI 300 Index added 2.26 per cent to 4,251.29.
The Shenzhen Composite Index jumped 2.83 per cent to close at 2,352.65, while the ChiNext board gained 2.44 per cent to 2,967.95.
In Hong Kong, the Hang Seng Index rose 0.59 per cent to 25,432.27 an hour before the close at 4 pm, with value seen as light since only HK$66 billion worth of shares exchanged hands.
The H-share index which tracks mainland Chinese share listed in the city added 0.89 per cent to 11,838.18, driven by a 7 per cent surge seen in Anhui Conch Cement. 
Investors are “licking their wounds,” tidying up their portfolios, cutting losses, and stockpiling cash, says Louis Tse of VC Capital.
Tse, who visited clients in China on Wednesday, says people are waiting to see how much government support the market has and whether stocks can stabilise above the 4,000 point level on the Shanghai Composite.
Investors often cluster stop loss limits around round number levels like 4,000. This can make trading volatile as people cash out as soon as the level is breached.
“They all say that if it goes to 4,300 they will sell,” said Tse referring to his clients.
Total market turnover on stocks tracked by the indices was 711 billion yuan by midday, well below recent averages, and reflective of how momentum has been sapped from the market as investors nurse losses and brokers become more circumspect about whom they extend margin lending services to.
 
 


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