Stocks continue to rise on reassurance
7 June 2007
The benchmark Shanghai Composite Index closed moderately up 0.24% to 3,776.3, extending Tuesday’s 2.6% gain, as calm returned to the market following reassuring comments from the central bank and the National Social Security Fund, one of the country’s biggest institutional investors, the Financial Times reported. A 7% drop in share prices last Wednesday, followed by a further 8% fall Monday,
indicated the difficulty for the authorities of inducing a
gradual sell-off. The sell-off started when the government tripled
the tax on share trading last Wednesday in a bid to dampen retail speculation. The government has been aiming to prevent a share price bubble while avoiding a market collapse.