BEIJING: China’s benchmark stock index erased losses of as much as 5.4 percent to end higher as energy and financial companies rallied. Shares earlier tumbled on news a brokerage suspended margin financing for investors in smaller companies.
The Shanghai Composite Index gained 0.8 percent to 4,947.10 at the close, even as almost two shares dropped for each that rose. Bank of Communications Co. jumped by the 10 percent daily limit to a five-year high, while Bank of China Ltd. and China Shenhua Energy Co. climbed more than 4 percent. The ChiNext index of smaller companies fell 1 percent, paring a drop of 7.2 percent. Golden Sun Securities Co. removed ChiNext stocks from its list of shares eligible for margin trading, citing the gauge’s recent gains and high price-to-earnings ratios.
“The market has realized that Golden Sun Securities is a small brokerage and it was an overreaction to the news,” said Dai Ming, a Shanghai-based fund manager at Hengsheng Asset Management Co. “It was like one-off panic selling. The most important thing is that we still haven’t seen a big change in the regulator’s attitude to the bull market, and the government still supports the market.”
