China stocks rise on small caps; property shares retreat
SHANGHAI: China stocks ended higher on Thursday, with a sharp rebound in small-caps offsetting the drag from property shares and investor caution ahead of a flurry of new listings.
The blue-chip CSI300 index rose 1.6 percent, to 3,774.97, while the Shanghai Composite Index gained 1.4 percent, to 3,617.06 points.
Wayne Shen, Shanghai-based fund manager at Ivy Assets, said that in the short term, the market was under pressure from upcoming initial public offerings, but looking forward, the market was not short of money.
"There's ample liquidity in this market," Shen said, expecting some investors who fled to bonds during the summer stock market rout are coming back to equities because the debt market is already frothy, and risky.
"Although there are few signs government stimulus has worked effectively to reinvigorate the economy, I don't think the situation would be worse."
Nearly all sectors rose, with tech shares leading the gains, while Shenzhen's start-up board ChiNext surged 4.3 percent.
But property stocks corrected on profit-taking. The CSI300 Real Estate index dipped 0.2 percent, following Wednesday's 3.5 percent jump.
Shen said that the rally in cyclical stocks, such as real estate, was not sustainable as investors were more interested in hi-tech start-ups, which represent China's future.