China shares rebound with biggest gain in 2014 as c.bank eases cash squeeze

HONG KONG Tue Jan 21, 2014 2:10am EST

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HONG KONG Jan 21 (Reuters) - China shares posted their biggest daily gain of the year on Tuesday, rebounding from a six-month low, as cash rates eased in the mainland after the Chinese central bank offered emergency funds to ease the latest cash squeeze.

China's money market rates fell sharply on Tuesday after the People's Bank of China dumped more than 255 billion yuan ($42 billion) into the financial system, easing concerns that another credit crunch was underway less than a month after a late December squeeze.

The CSI300 of the largest Shanghai and Shenzhen A-share listings finished up 1 percent, led by financials, after closing on Monday at its lowest since July 9.

It was its biggest single-day gain since Dec. 31.

The Shanghai Composite Index ended up 0.9 percent to 2,008.3 points, creeping back above the much-watched 2,000-point level after closing below it on Monday for the first time since July 31.

Gains were not accompanied by a spike in volumes in Shanghai. Instead, investors channeled funds towards the second batch of eight initial public offerings that made their listing debuts in Shenzhen, five of them on the ChiNext board.

The ChiNext Composite Index of startups in mainly nascent industries such as technology soared 2.4 percent. (Reporting by Clement Tan; Editing by Kim Coghill)

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