By Li Zengxin (chinadaily.com.cn)
Updated: 2007-08-21 17:09

After yesterday's 5.33 percnet leap, the largest single-day growth in two years, Chinese stocks continued marching toward the critical 5,000-point zone today. The Shanghai Composite Index closed 50.35 points or 1.03 percent higher at 4,955.21, surpassing the previous record highs.

Total turnover of the stocks in the major indices was 242.1 billion yuan, the largest in a week.

Shanghai Composite Index
Source: www.sina.com.cn

 

The benchmark Shanghai Composite Index opened higher at 4,944.21 and remained above yesterday's closing level through a few short-ranged swings. It hit its low of 4,917.82 around noon and the highest 4,982.98 in the mid of the afternoon session.

Shenzhen Component Index
Source: www.sina.com.cn

The Shenzhen Component Index, tracking the smaller Shenzhen Stock Exchange, finished at a new record high of 16,859.97, up 270.71 points or 1.63 percent than yesterday's close. It went through the day in a range of between 16,661.83 and 16,939.45, both above the pervious closing figure.

Of the A shares listed in the two exchanges, 775 went up, including 30 of them sealed at the maximum growth cap of 10 percent, while 580 dropped and 143 ended unchanged.

Stocks in the non-ferrous metals, pharmaceutical and wholesale and retail industries led the surge, while financial shares including the Industrial and Commercial Bank of China and China Minsheng Banking Corp contributed most to the index rise.

Meanwhile, China has approved individual investors for direct investment overseas in certain designated areas. Investors can use their foreign exchange or purchase foreign currency to open an account with Bank of China's Tianjin branch or Bank of China International Securities in Hong Kong, according to a statement by the State Administration of Foreign Exchange on its website yesterday.

The investment amount will not be subject to the annual limit of US$50,000 for individuals who purchase foreign exchange.

Analysts believe the move is intended to address the excessive liquidity problem and release pressures for the yuan's appreciation. Industrial experts believe the new policy, when expanded to a larger extent in the country, may help divert some of the floating capital out of the red-hot A-share market, reducing volatility.

On the other hand, however, the slow-down of red chips returning to the home market limits capital to outgoing channels, said analysts. Red-chip companies including China Mobile and China Overseas Land & Investment Ltd have said they were postponing the return.