China shares end higher on global stimulus hopes

Fri Jan 22, 2016 8:16am EST
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By Nathaniel Taplin and Samuel Shen

SHANGHAI (Reuters) - China's fragile shares ended higher on Friday, in a relatively muted response to hints of more policy stimulus in Europe and Japan that prompted a robust rally in battered oil prices and equities elsewhere.

While Japan's Nikkei jumped nearly 6 percent and Brent crude was up more than 5 percent, the benchmark Shanghai Composite Index .SSEC managed a rise of just 1.25 percent, following sharp losses on Thursday.

The CSI300 index .CSI300 of the largest listed companies in Shanghai and Shenzhen closed up 1 percent.

The indexes veered between positive and negative territory during the day, with little volume behind the trade. The Shanghai Composite did at least end the week marginally higher than it began, for the first time in 2016, but not the CSI300.

Investors appear increasingly reluctant to risk their money on China's fickle markets, which have slumped about 17 percent so far this year, and morning gains have often turned to losses by close of day as traders quickly take profits.

Highlighting the lack of faith in the markets, trading volumes in January have been about a third of typical levels last year, which only exaggerates price movements.

On Thursday, Vice President Li Yuanchao sought to reassure investors that Beijing would use regulations to prevent volatility in a market that was "not yet mature".

"An excessively fluctuating market is a market of speculation where only the few will gain the most benefit when most people suffer," Li, who is attending the World Economic Forum in Davos, said in an interview with Bloomberg.   Continued...

An investor walks past an electronic screen showing stock information at a brokerage house in Hangzhou, Zhejiang province, January 21, 2015.  REUTERS/China Daily