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China stocks end up on rebound by banks

(Agencies)
Updated: 2009-02-25 15:58

China's main stock index rebounded to end slightly higher on Wednesday as banking shares recovered in late trade, but analysts said it was not clear that the market was resuming an extended uptrend.

Related readings:  Wary investors send Chinese shares 0.8% lower at mid-day  Chinese shares continue gains on stimulus plans  China stocks rebound a bit but turnover shrinks

The Shanghai Composite Index, which tumbled 4.56 percent on Tuesday and was down as much as 2.6 percent in the early afternoon on Wednesday, closed 0.27 percent higher at 2,206.57 points.

China Merchants Bank shot up 8.12 percent to 14.91 yuan in its heaviest trade since April 2006. A total of 4.8 billion of its shares will become tradable on March 2 when a lock-up period for institutional investors expires; the prospect had been weighing on the shares, but analysts said some investors bet on Wednesday that the expiry would not produce heavy selling.

Shenzhen Development Bank (SDB) resuming trade after being suspended since Monday afternoon, closed 1.07 percent higher at 15.15 yuan after falling over 4 percent earlier on Wednesday.

Late on Tuesday, the bank denied a local media report that it had been discussing the possibility of a merger with China Development Bank. SDB jumped its 10 percent daily limit on Monday in response to the report.