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China shares inch up, small caps lend support
December 25, 2013 / 5:00 AM / 4 years ago

China shares inch up, small caps lend support

* Shanghai composite index up 0.4 pct, CSI300 gains 0.5 pct

* Supported by strength in small caps

* Worries remain about tight money condition, to cap gains

By Chen Yixin and Kazunori Takada

SHANGHAI, Dec 25 (Reuters) - Chinese shares edged up on Wednesday, extending their rise from the previous session as short-term interest rates eased further from six-month peaks and small caps rebounded.

The Shanghai Composite Index, which tracks all shares on the Shanghai board, was up 0.4 percent at midday. The CSI300 index of the top Shanghai and Shenzhen listings gained 0.5 percent.

The ChiNext composite index, which consists mainly of small tech shares listed in Shenzhen, rose 2.1 percent, adding to gains from the previous day.

Hong Kong markets were closed for Christmas holiday and will reopen on Friday.

Analysts said while money market rates were showing signs of stabilising, worries still remain ahead of the year end and that is likely to limit gains in shares.

“Such small caps are quite easy to speculate using a small amount of money,” said Zhang Qi, analyst at Haitong Securities in Shanghai.

“But as money conditions ahead of the year-end are still tight, the large-cap shares are unlikely to rise sharply.”

China’s short-term money market rates extended their fall from six-month peaks on Wednesday as corporate tax refunds deposited to commercial banks helped ease liquidity conditions, traders said.

Fourteen shares, including Shenzhen Maxonic Automation Control Co, Ningbo Xianfeng New Material Co and Jiangsu Skyray Instrument Co, in the ChiNext index jumped by their 10 percent daily limit. ($1 = 6.2547 Chinese yuan) (Editing by Himani Sarkar)

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