China stocks reach another 7-year high; tech stocks surge
By Samuel Shen and Pete Sweeney
SHANGHAI May 26 (Reuters) - China stocks rose again on Tuesday to another seven-year high, with tech stocks returning to investors' favour on fresh signs of government support.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 2.0 percent, to 5,198.92, while the Shanghai Composite Index gained 2.0 percent, to 4,910.90 points.
Retails investors, including university students, barbers and janitors, are all piling into stocks, as they believe the market has resumed its upward momentum after a month-long consolidation in benchmark indexes.
Shenzhen's tech-heavy start-up board ChiNext, which corrected in previous sessions over regulatory crackdown concerns, surged 4.6 percent amid signs that governments at various levels are encouraging investment in technology and innovation.
Shanghai announced an ambitious plan to build the city into a globally competitive technological innovation centre, while Zhang Yujun, a senior securities regulator, urged brokerages on Monday to actively embrace the Internet.
Defence-related stocks also surged, after China released its first white paper on military strategy on Tuesday, stressing the "active defence" guideline and pledging closer international security cooperation.
China Satellite, Sichuan Chengfei Technology Integration and aviation defence heavyweight AVIC Aircraft all rose by 10 percent on Tuesday.
But the CSI300 banking index underperformed, rising only 0.2 percent, on fears over the sector's asset quality. China's banking regulator recently warned of rising credit risk from real estate, local government debt and unconventional forms of finance.
Investors brushed aside concerns over the pace of initial public offerings. China's securities regulator gave the IPO go-ahead on Friday to China National Nuclear Corporation (CNNC), which aims to raise money to help fund five major projects with a total investment of 13.38 billion yuan ($2.16 billion). (Reporting by the Shanghai Newsroom; Editing by Richard Borsuk)
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