Mainland Chinese investors on Thursday sold down their holdings of smaller speculative stocks and bid up blue-chips in a flight to quality that analysts said was prompted by the government’s efforts to deflate the stock market bubble.
The benchmark Shanghai Composite index closed up 1.4 per cent on Thursday, a day after it fell 6.5 per cent in response to a tripling of the share trading stamp duty.
The share price of China Petroleum & Chemical Corporation, commonly known as Sinopec , had been relatively stagnant for the past two months. On Thursday, Asia’s largest oil refiner led the gains among blue-chips, rising by the daily 10 per cent limit in Shanghai to close at Rmb14.85. Earlier in the day, it announced a major oil discovery in western China.
Of the total 1,400 listed companies in China, more than 270 stocks ” most of them small and of poor quality ” fell by the daily limit of 10 per cent in Shanghai and Shenzhen on Thursday as nervous investors liquidated speculative bets of recent months.