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Chinese shares rebounded yesterday to close slightly higher after tech counters such as BOE Technology Co recovered from recent steep falls, brokers said.
The benchmark Shanghai composite index grouping hard-currency B shares for overseas investors and yuan-denominated A shares, finished 0.61 percent higher at 1,406.104 points, bouncing off the psychologically crucial 1,400-point support level.
The index had easily broken the key support level on Monday after a near 10 percent decline over the past two months, battered by a rash of stock offers.
"Recent sharp declines have eased selling pressure and led to a technical rebound," said analyst Zhang Yong at Shanghai Securities.
Analysts said the rebound was aided by bargain hunting in tech stocks that posted good earnings.
BOE Technology, a television parts maker turned high-tech hopeful, was among the top B-share gainers, jumping 3.09 percent to HK$5 (64 US cents).
The firm's second-quarter net earnings tripled from a year earlier.
Networking player Unionfriend Network Co Ltd was the best performer in Shenzhen, surging 9.95 percent to 8.95 yuan (US$1.08).
Dairy maker Beijing Sanyuan Foods Co Ltd, which holds the McDonald's franchises in Beijing and booming Guangdong Province, made a strong debut on Monday and extended its gains with a 1.51 percent rally to 7.41 yuan (89 US cents) yesterday.
Sanyuan, a unit of Hong Kong-listed Beijing Enterprises, listed on the Shanghai exchange and jumped 181 percent to 7.30 yuan (88 US cents) on Monday - the second-highest debut this year.
In April, Shaanxi Aerospace Power Hi-tech Co Ltd saw its A share soar 228 percent on its first day in Shanghai.
Sanyuan Foods enticed investors as it was the country's first IPO giving investors access to an international fast-food franchise, brokers said.
But analysts foresaw weakness in the short run in spite of yesterday's rebound.
"The index is likely to move narrowly in the near term on lack of follow-through buying, with consecutive share offers diverting funds from existing stocks," Zhang said.
A shares of index heavyweight China Merchants Bank Co Ltd dropped 1.25 percent to 9.48 yuan (US$1.14) as investors jeered its plan to issue 10 billion yuan (US$1.21 billion) in convertible bonds - China's largest-ever issue of the instrument.
Analysts said some investors were unhappy with the bond issue as it would dilute earnings over coming years.
On the foreign exchange market, China's yuan ended one notch weaker versus the US dollar at 8.2775 yesterday, at the stronger end of its managed trading range.
The yuan moves in a band of 8.2760 to 8.2800 enforced by the central bank.
Turnover fell to a thin US$400 million from US$460 million on Monday. The yuan softened to 7.0970 against 100 Japanese yen from 7.0422 and weakened versus the euro to 9.3406 from 9.3350.
Shanghai copper futures ended lower in slack trade yesterday, ignoring a slight rebound on the London Metal Exchange, traders said.
The most active January contract ended 10 yuan (US$1.2) lower at 18,200 yuan (US$2,198) a ton, while others closed down 10 yuan (US$1.2) to 50 yuan (US$6). Combined volume fell to a sluggish 32,610 lots from Monday's 58,216 lots.
LME three-month copper rose US$9 to US$1,805 at Monday's kerb close after early Chinese buying, traders said. But it erased some gains in inter-office trade with the contract quoted at US$1,800/1,803 in Asian trade yesterday.
Spot copper in Shanghai ended 130 yuan (US$15.7) to 180 yuan (US$21.7) lower to trade in a range of 18,270 yuan to 18,320 yuan (US$2,207-2,213) yesterday.
(China Daily September 17, 2003)
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