Stocks rebound to regain 5,000-point mark

Beijing—Chinese stocks made a big comeback on Thursday to edge just over 5,000 points again, recovering part of the more than 20 percent losses in less than two months.
An investor monitors stock price movements at a brokerage in Haikou, South China’s Hainan Province November 28, 2007. [newsphoto] The benchmark Shanghai Composite Index rose 4.16 percent to close at 5,003.33 points, reversing three consecutive days of losses. Before the rebound, the gauge lost 21.57 percent since peaking on October 16. Other indicators also increased. The Shenzhen Composite Index gained 3.06 percent to 1,257.26, while the CSI 300 Index of major companies in the two bourses went up 4.16 percent to 4,842.07.
Turnover in Shanghai and Shenzhen rose to 116.43 billion yuan, an increase of 50.45 percent over the previous session, indicating a recovery of investor confidence. The market needed a technical rebound after several days of corrections, analysts said. But they were uncertain whether the recovery will last.
Another factor that might contribute to Thursday’s rally might be a surge in the global equity markets after a senior Federal Reserve official from the United States hinted at a further rate cut. Don Kohn, vice-chairman of the Fed, said the US central bank would be “flexible and pragmatic” in responding to new risks to growth arising from the relapse in financial markets.
After Kohn’s comment, stocks rallied, with the Dow Jones Industrial average jumping 2.6 percent on Wednesday, its biggest percentage gain since April 2003. Japan’s Nikkei 225 average rose 2.38 percent on Thursday. Back in Shanghai and Shenzhen, blue chips led the surge. PetroChina rose 2.77 percent to close at 33.04 yuan per share, while Sinopec jumped 8.77 percent to 21.83 yuan.

—The Daily Mail, China Daily news exchange item