BEIJING: China’s stocks rose for a third day on Friday, but gains were largely capped as investors took profit in blue chip companies after the market rallied to 2-1/2 month highs this week.
By the midday break, the CSI300 index was up 0.7 percent, at 3,733.42 points, while the Shanghai Composite Index gained 0.5 percent, to 3,541.02 points.
“Retail investors took profit and sold shares of securities, banks and other blue chip companies, which weighed on the composite index,” said Tian Weidong, an analyst at Kaiyuan Securities in Xian.
“Yet the correction seemed modest, indicating the overall market sentiment is warming.”
The mainland stock market has gained more than 20 percent from the troughs they hit during the August stock crash, and the rally this week has driven trading volume to a three-month high
Shares of blue chip stocks retreated from the blistering boost that was kicked off by the expectation of an upcoming trading connect between Hong Kong and Shenzhen stock markets and other signs of tentative recovery in the Chinese economy.
The start-up board ChiNext gained 2.7 percent, lending support to the broader market. The index has now rebounded 46 percent from its mid-September low.
The information technology sector outperformed the main and other sector indexes, up 3.4 percent, buoyed by the expectation that China plans to push ahead reforms in the industry over the next five years from 2016 and 2020.
For companies, shares of securities brokerages posted sustained gains, with Everbright up 6.8 percent, Soochow Securities up 4 percent and Huatai Security up 3 percent. The majority of securities firms hit a daily upward limit of 10 percent the previous session.
Tongfang Guoxin Electronics Co hit the daily trading limit after the company said it plans to invest 80 billion yuan ($12.60 billion) in building a new memory chip factory and making acquisitions.
