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China Share Prices Rebound
2005-6-6 20:12:35
Share prices in China rebounded on Monday.
Share prices in China rose Monday, helped by rumors the government might take action to support the ailing market.

The benchmark Shanghai Composite Index, which earlier dipped below the psychologically important 1,000-point mark for the first time in eight years, bounced back in the afternoon, gaining 20.74 points, or 2.1 percent, to close at 1,034.38. 

Active buying by investment funds of large-capital shares helped fuel the rebound, which followed rumors that the government might move to shore up sagging prices, dealers said.

Plans to reform state shareholdings have weighed heavily on investor sentiment in recent weeks.

"It is likely that today's rebound is temporary," said Lu Wei, a dealer at East Asia Securities in Shanghai. "After all, there is still no solid reason for stock prices to rise."

A state-run newspaper, the China Business Times, reported Monday that China's stock market watchdog, has temporarily stopped taking applications for initial public offerings and other fund-raising activities.

The China Securities Regulatory Commission advised the heads of 45 securities companies of the decision in a recent meeting, the newspaper said in a report on its Web site.

The commission has not made any public announcement of the decision.

In late April, the CSRC launched trial sales of nontradable shares, which are mostly held by the government. Such shares account for roughly two-thirds of China's stock market capitalization.

Investors fear that such sales could result in a glut of shares that would push prices lower.


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