China stocks reverse earlier losses to end sharply higher
SHANGHAI, June 23 (Reuters) - China stocks ended sharply higher in a volatile session on Tuesday, after an earlier sell-off attracted fresh buying from both local and foreign investors who believe the bull market is not yet over.
The market resumed trading after a public holiday on Monday with some investors cutting losses following last week's 13 percent tumble, but the indexes swung wildly in and out of positive territory over the day.
At the end of session, the CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 3.2 percent, to 4,786.09, while the Shanghai Composite Index gained 2.2 percent, to 4,576.49 points.
Last week's sharp correction was triggered by fresh government moves to tighten margin financing, and worsened by a tidal wave of initial public offerings that sapped liquidity.
A mild rebound on Tuesday morning was used by some investors to dump shares, knocking key indexes down more than 2 percent at one point.
"Many highly-leveraged investors are forced to sell shares at all costs due to margin calls," said Zhou Lin, analyst at Huatai Securities Co.
But stocks staged a rebound in afternoon trade, with some investors drawing encouragement from a chorus of bullish comments from state-run financial newspapers arguing that the logic supporting the bull market has not changed.
Some analysts also attributed the rebound to improving liquidity situations this week.
"There might be an expectation of a recovery in the market as a substantial amount of capital, locked up for IPOs, will be released," said Gerry Alfonso, director at Shenwen Hongyuan Securities Co. Continuación...