China stocks rebound for second day as money unlocked from IPOs
SHANGHAI, June 24 (Reuters) - China stocks gained for a second day on Wednesday, aided by liquidity unlocked from recent IPOs, as some investors took advantage of last week's market collapse to buy relatively cheap shares.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen was up 2.0 percent at 4,880.13 points, while the Shanghai Composite Index rose 2.5 percent to 4,690.15 points.
Stocks rose across the board, with transport and infrastructure firms leading the charge.
Hong Hao, chief strategist with BOCOM International, said that last week's 13 percent tumble in China stocks had wiped out excessively-leveraged punters in the market, setting the stage for healthier rises.
"Those who bet with the highest level of leverage are out of the game, and the market is stabilising. The market uptrend is not changed," Hong said.
The market, which was hit by a big wave of initial public offerings last week, also benefited on Wednesday from some subscription money unlocked from the IPOs, which analysts estimate to be around 2 trillion yuan ($322.2 billion).
HSBC cautioned that while there are some opportunities in China stocks following the recent correction, the consolidation will likely continue in the near-term as the leverage-driven rally ends.
HSBC's quantitative analysis identifies opportunities in sectors including banks, healthcare, industrials, duty-free store, home appliance and cosmetics. (Reporting by Samuel Shen and Pete Sweeney; Editing by Shri Navaratnam)
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