China stocks rise on fresh policy easing but short selling regulations hobble gains

lunes 20 de abril de 2015 00:32 GYT

By Pete Sweeney and Samuel Shen

SHANGHAI, April 20 (Reuters) - China stocks rose to fresh seven-year highs on Monday as the central bank ramped up efforts to bolster the slowing economy, cutting banks' reserve requirements by the biggest amount since the depths of the global financial crisis.

But gains were limited by fears of further crackdowns on margin financing and other measures which investors feared could take the steam out of the Chinese market's world-beating rally.

Securities regulators announced on Friday they would allow fund managers to lend shares for short-selling, and ban margin financing through unregulated accounts.

The two policies triggered a heated tug-of-war between bulls and bears, which resulted in highly volatile trade on Monday.

The CSI300 index fell at the open but ended the morning session up 1.2 percent at 4,652.61 points, while the Shanghai Composite Index gained 1.0 percent, to 4,331.28 points.

"The government is sending a clear signal: the stock index is too high," Zhang Yunyi, general manager of Shanghai-based hedge fund manager Hongyi Investment said.

He expects the market to consolidate for about two months, after climbing seven weeks straight and rallying over 80 percent since late November.

But others drew optimism from the central bank's move on Sunday to cut the amount of cash that banks must hold as reserves, adding more liquidity to the world's second-biggest economy to help spur bank lending and combat slowing growth.   Continuación...