Chinese shares rebounded strongly Wednesday, ending four straight trading sessions of decline.

 

The benchmark Shanghai Composite Index, which covers both A and B shares, soared 254.57 points, or 4.94 percent, to 5,412.69.

 

The key index was still 11 percent lower from its record closing of 6,092.06 on October 16. Despite the recent correction, it has surged 102 percent so far this year.

 

The Shenzhen Component Index on the smaller Shenzhen Stock Exchange rose 607.66 points, or 3.63 percent, to 17,355.55.

 

The Hushen 300 Index, accounting for 60 percent of the nation's two stock markets value, gained 206.64 points, or 4.18 percent, to 5,145.89.

 

Investor confidence got a boost from Wall Street overnight and a rebound in Hong Kong. It was also aided by media reports that new mutual funds may be approved for subscriptions, said Wan Bing, a Guangfa Securities analyst.

 

The Dow Jones Industrial Average rose 319.54 points or 2.46 percent to 13,307.09 overnight. Hong Kong's benchmark Hang Seng Index rose 1,362.66 points, or 4.9 percent, to close at 29,166.01 on Wednesday.

 

Combined turnover at the two bourses expanded by a small margin to 130 billion yuan (US$17.5 billion) from 126 billion yuan on Tuesday.

 

Analysts said this showed that investors were still cautious on worries that the government may introduce further interest rate hikes and other tightening measures over the weekend to curb strong inflation and a surging economy.

 

China's consumer price index rose to 6.5 percent in October, up from 6.2 percent in September and matching the 11-year monthly record in August, the National Bureau of Statistics said on Tuesday.

 

Finance, steel and energy stocks led the advance on Wednesday. China Life rose 8.21 percent to 64.97 yuan, while the Industrial and Commercial Bank of China increased 4.38 percent to 8.35 yuan.

 

Baoshan Iron and Steel added 4.01 percent to 16.07 yuan and China Shenhua Energy soared 9.94 percent to 70.34 yuan.

 

PetroChina climbed five percent to 38.88 yuan and China Petroleum and Chemical Corporation, better known as Sinopec, jumped 3.87 percent to 23.90 yuan.

 

The A-share Index on the Shanghai Stock Exchange rose 267.42 points, or 4.94 percent, to 5,682.55, and the B-share Index climbed 14.73 points, or 4.46 percent, to 344.76.

 

(Xinhua News Agency November 15, 2007)