Mainland, Hong Kong shares surge in late afternoon trading
BEIJING, April 29
BEIJING, April 29 (Reuters) - Mainland stocks surged in the final hour of trading on Tuesday, with the Shanghai Composite Index climbing one percent over the final hour of trade, leaving the index up 0.8 percent at the close.
The gains spelled the end of a four-day losing streak that had seen the SSEC dropping below 2,000 points shortly after lunch.
It also had a knock-on affect on the Hong Kong market, with the HSI gaining more than one percent in the final hour before close.
Analysts and fund managers contacted by Reuters said it was very possible the sudden jump suggested asset management companies had stepped in to support the index as it neared the 2,000 line, seen widely as a "bottom line" for value, below which the authorities are reluctant to see it fall.
"It is not impossible that we are seeing some protection" said Du Changchun, an analyst at Northeastern Securities in Shanghai.
"A rally also makes sense, it's quite unlikely the index would continue below 2,000."
At 1:40pm the index fell below the 2,000 mark, 15 minutes before the rebound began. Twenty minutes later the index shot up 0.8 percent in the space of ten minutes.
Similar patterns have occurred in recent months. On March 20 the index dipped below 2,000 for two hours, before jumping 2.7 percent in the next eighty minutes.
Investor confidence had suffered a blow last week after the securities regulator published the listing prospectuses of 144 new firms in the space of just 10 days following a two month listing hiaitus, in a move that surprised investors and industry insiders alike.
The resumption of listings worries investors, who fear that more companies entering the market will siphon off funds from existing firms, bringing overall values down. (Reporting By Natalie Thomas; Editing by Michael Urquhart)
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