It’s turned out to be another strange day in Chinese equities following Monday afternoon’s sudden nosedive, with a sharp downturn for Shenzhen-listed stocks on Tuesday afternoon taking a U-turn so hard it has managed to push the bourse’s benchmark index well into positive territory.
The Shenzhen Composite Index was up 1.2 per cent at 1872.69 shortly before the close on Tuesday, clawing its way back from an afternoon dive that saw it drop as much as 1.5 per cent.
The Shanghai Composite Index registered a similar post-lunch resurrection, rising from an intraday drop of 1 per cent to be up 0.1 per cent in the final minutes of trade at 3325.21.
Both bourses had experienced a similarly sudden fall (sans rebound) on Monday afternoon after state media reported China’s securities regulator had approved 10 initial public offerings for the mainland’s “A-share” market.
Mainland-listed shares often spike markedly in the first day of trade, hogging the available cash on hand to investors and potentially prompting those without any to sell the stocks they already own in order to take part in the new listings.
However no such announcement preceded Tuesday’s rout-turned-rally, which saw broad gains across all segments of the Shenzhen composite ahead of the close and in Shanghai left only financial, real estate, telecoms and utilities with losses in the final minutes of trade.