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Wednesday, September 16, 2015, 15:16

Shanghai stocks close up over 4%

By Agencies

Shanghai stocks close up over 4%
A Chinese investor monitors stock prices at a brokerage house in Shanghai, Aug 26, 2015. (AFP Photo)

BEIJING - Chinese stocks rebounded on Wednesday after Chinese police began investigating senior managers at CITIC Securities, the country's biggest brokerage.

The benchmark Shanghai Composite Index was up 4.89 percent to end at 3,152.26 points.

The Shenzhen Component Index rose 6.45 percent to close at 9,890.43 points. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, climbed 7.16 percent to close at 1,926.25 points.

The jump comes after stocks fell 6 percent over Monday and Tuesday, raising fears that a significant slide was on the cards.

Chinese police are probing CITIC Securities executives, the company said on Tuesday, as Beijing intensifies its scrutiny of irregular stock market activity following heavy losses since June.

The news emerged on another bad day for shares, which dropped by almost 4 percent in a further blow to hopes that a slew of regulatory measures issued by Beijing over the past three months had brought some stability to prices.

Authorities have been alarmed by the steep equities selloff, which they suspect is linked to alleged market manipulation.

Among the key players in Beijing's sights is CITIC, where Cheng Boming, general manager and executive director since 2012, and Wang Jinling, vice manager of the information technology centre, are both suspected of insider trading and leaking information, the company said.

Since the stock market selloff, authorities have taken an increasingly tough line on alleged manipulation, netting even journalists, social media users and regulators.

In August, four senior executives from CITIC confessed to insider dealing, state media reported.

CITIC's Hong Kong-listed shares dropped more than 4 percent in early trading on Wednesday, but reduced those losses to close 0.7 percent lower. Its Shanghai-listed shares jumped 6.95 percent higher.

Concerns about the Chinese economy mean stocks are down 6 percent so far this week, with the drop exacerbated by thin trading volumes as many investors opt to stay on the sidelines.

Chinese equity markets have dropped around 40 percent since mid-June.

Some retail investors told Reuters they were waiting for the Shanghai Composite index to go down to 2,500 before they started buying again.

"With a slim chance of making a profit in this market, money is not coming in," said Zhou Lin, analyst at Huatai Securities.

Data showed heavy investor redemptions last month, with total net assets of Chinese stock funds slumping 44 percent to 724.8 billion yuan (US$114 billion).

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