China stocks reverse course, climb to 7-year high after a wild ride

jueves 4 de junio de 2015 05:13 GYT

By Samuel Shen and Pete Sweeney

SHANGHAI, June 4 (Reuters) - China's stock market went on a dramatic roller-coaster ride on Thursday, with an after-lunch meltdown spurring a wave of fresh buying that produced gains for the day instead of a sharp loss.

The wild swing - at one point 3.4 trillion yuan ($548 billion) of market capitalisation had been wiped out - came one week after the market plunged more than 6 percent.

And it underscored increasing volatility in the high-flying, and highly-leveraged, China market.

The pattern of abrupt falls being followed by a quick rebound has become a "new normal" for China, said Hong Hao, chief China strategist at Bank of Communications Co.

"Many investors are holding cash on the sidelines, so when they see tumbles like this, they jump in," he said.

"The upward trend is not changed," Hong said, advising investors to buy small on dips, and buy big on a slump.

The Shanghai Composite Index, down 5.3 percent at the lowest point on Thursday, in the end rose 0.8 percent, to 4,947.10 points, its highest close since January 2008.

The CSI300 index, also down more than 5 percent in early afternoon, rose 0.7 percent, to 5,181.42.   Continuación...