Chinese shares close 4.45 percent higher

Chinese share prices surged to close up 4.45 percent on Monday as gains in overseas markets as well as steel and mining stocks drove a wave of bargain hunting, dealers said.

The Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B shares, jumped 4.45 percent, or 153.37 points, to 3,599.62 at 3pm. Today's gain was the biggest since March 28, when the index jumped 4.94 percent.

Gainers in the Shanghai market outnumbered losers 793 to 48, while 11 were unchanged.

The Shenzhen Composite Index, which covers the mainland's smaller stock market, was up 6.14 percent, or 61.73 points, to 1,067.63.

Metal stocks were in focus on strong copper prices and robust 2007 earnings from Liuzhou Iron and Steel, in what analysts described as a technical rebound in response to share prices that have tumbled around 35 percent since January.

"The market rebounded technically after shares had been seriously oversold, with blue chips also bolstered by some new stock funds which are building their positions," said Cao Yan, an analyst at Soochow Securities.

The China Insurance Regulatory Commission (CIRC) gave its approval Monday to three more insurance companies to invest in local stock markets, a move expected to boost tight liquidity.

Liuzhou Iron and Steel rose by the 10 percent daily trading limit to 15.16 yuan, after the company reported its 2007 net profit rose 32 percent.

Chen Jinren, an analyst at Huatai Securities, added that sharp gains in overseas markets added to the positive sentiment, especially in battered financial plays.

Sinopec, Asia's largest oil refiner, jumped 4.25 percent to 12.99 yuan although it reported its 2007 net profit rose only 5.5 percent due to surging international crude prices and government price curbs.

The Shanghai A-share Index rose 160.87 points or 4.45 percent to 3,777.25 on turnover of 84.3 billion yuan. The Shenzhen A-share Index was up 65.42 points or 6.20 percent at 1,120.83 on turnover of 37.4 billion yuan.

(Agencies)