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China's shares closed firmer Wednesday, helped by a rebound in telecom stocks, but indices failed to cling to intraday highs because of persistent worries about liquidity, brokers said.
Shanghai's benchmark composite index climbed 12.660 points, or 0.83 percent, to finish at 1537.388, while Shenzhen's sub index rose 23.67 points, or 0.76 percent to end at 3138.53.
Shenzhen's B share index ended up 1.11 percent at 220.10 points in thin trade and Shanghai's rose 0.73 per cent to 139.807.
Turnover on the hard currency B shares, open to foreign and Chinese investors, was US$9.08 million in Shanghai and just HK$55.24 million (US$7 million) in Shenzhen.
"A rebound emerged as technical charts had showed strong signs of overselling," said Shao Rui, a senior analyst at Shanghai Securities.
"But fresh selling set in late today, partly due to liquidity worries sparked by the recent frequent A share initial public offerings and additional A share offers by listed companies."
The 14-day Relative Strength Index (RSI) had been below the oversold 30 mark since late September as indices dropped due to the frequent share offers, poor corporate earnings and a crackdown on market irregularities.
Yesterday, China United Telecommunications Corp Ltd, which accounts for nearly two per cent of Shanghai's A share index, ended up 0.34 per cent at 2.99 yuan after having risen as high as 2.35 per cent in intraday trade.
The cellular giant holds an indirect stake in China Unicom Ltd, whose Hong Kong shares closed up 4.5 per cent at HK$4.6 following a fourth straight day of strong gains on Wall Street.
"A rise in Hong Kong telecom companies helped a similar rally on mainland exchanges," said analyst Pei Xiaoyan of United Securities.
Domestic A shares in mobile phone maker ZTE Corp, which plans a US$450 million stock offer in Hong Kong and New York in November, ended up 1.57 per cent at 15.50 yuan in Shenzhen, having risen 3.8 per cent in early trade.
"The rebound today helped stabilize sentiment slightly, but thin volume indicated most investors kept on the sidelines," said analyst Luo Yanxin of Guohai Securities.
Analysts said they expected range-bound trade in the next few days as investors looked for fresh market leads.
The benchmark Shanghai composite index, down 8.2 percent since September 3, was likely to move between 1,520 and 1,560 points, above support at the psychologically important 1,500 level, they said.
(china.org.cn October 17, 2002)
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