China, Hong Kong shares recover after wild speculation on new STAR tech board fades
- Four STAR tech companies closed higher, but 21 of Monday’s big winners plunged
- New STAR tech board is ‘just like a gambling casino,’ says Castor Pang Wai-sun
China and Hong Kong stocks recovered on Tuesday as investors shifted their focus back to the main boards and away from Shanghai’s new STAR technology board, which had seen jaw-dropping gains before speculators took their profits and ran.
The Shanghai Composite – which fell 1.3 per cent to a one-month low on Monday amid the stampede to the Nasdaq-style STAR board – rose 0.5 per cent to close at 2,899.94.
The Shenzhen Component Index added 0.6 per cent to 9,175.83. The ChiNext Index of Shenzhen-listed start-ups jumped 1.3 per cent to 1,534.93.
In Hong Kong, the Hang Seng Index recouped early losses to trade 0.3 per cent higher to 28,466.48.
Monday’s high-fliers on the new STAR board saw gains as high as 521 per cent at one point. But Tuesday was a different story, with all but four suffering big drops. China Railway Signal & Communication, which specialises in train control systems, led the declines, with a 18 per cent loss to 10.1 yuan.
Transaction volume in the 25 stocks listed on STAR stood at 20 billion yuan (US$2.9 billion), a decided drop from the 49 billion yuan achieved on Monday. Turnover in Shanghai and Shenzhen reached 323 billion yuan in total.