China shares end up for sixth day on policy boost

 

China's benchmark stock index closed up 1.7 percent for the sixth straight day on Tuesday, led by gold miners' shares, amid continued signs of government policy support for equity trading, including that the stock regulator was pushing more securities mutual funds into the market.

The Shanghai Composite Index closed at 2,930.475 points, having gained more than 10 percent since it hit this year's intra-day low on Sept. 1, with policy support offsetting profit-taking pressure and heavy supplies of new shares.

Zhongjin Gold climbed 5.7 percent to 59.99 yuan after U.S. gold futures hit $1,000 an ounce for the first time since February as the dollar's weakness, concerns about the sustainability of the global economic recovery and worries about future inflation under pinned sentiment.

Gaining Shanghai A shares overwhelmed losers by 758 to 105, while turnover rose slightly to a relatively decent 148 billion yuan ($22 billion) from 146 billion on Monday.

The official China Securities Journal reported that nine securities mutual funds, tracking China's stock indices, are being launched in September, pumping 50 billion yuan ($7.3billion) into the market.

In line with other official comments in recent weeks, which propped up the market, central bank Vice Governor Su Ning said on Tuesday that China had not indicated it was planning to shift monetary policy one of the key concerns that caused the market to plunge 22 percent in August.

"We never said we will adjust monetary policy" Su told reporters during a visit to Taiwan when asked if there was room to move interest rates.

Regulators appear to have taken steps to bolster the market since early this month ahead of the Oct. 1 National Day which marks the 60th anniversary of the founding of the People's Republic of China, seen as one of the country's major political events when Beijing typically tries to keep the market stable.

Last Friday, China's FX regulator announced new draft rules governing investment quotas for the Qualified Foreign Institutional Investors, raising the upward limit for individual institutions to $1 billion from the existing $800 million.

And China's banking regulator said last Thursday it would only gradually exclude cross-bank holdings of subordinated bonds and similar instruments from banks' capital base, taking some of the sting out of tighter new rules, which had hit the market severely. ($1 = 6.83 yuan)