Friday, September 19, 2008

China stock prices open 9.06% higher following stamp tax cut

China stock prices soared 9.06 percent at opening on Friday after the government moved to scrap the stamp tax on stock purchase, effective Friday, in a move to boost the equities market.

The government said late Thursday it would cancel the 0.1-percent stamp tax on purchasing shares while that on share selling remained unchanged at 0.1 percent.

The move came after domestic stocks fell for three consecutive days under the influence of U.S. financial market upheaval.

Also on Thursday, the government's investment arm -- Central Huijin Investment Co., Ltd. -- said it would buy shares of three major Chinese lenders on the secondary market to fortify their share prices.

The three lenders, the Industrial and Commercial Bank of China, the Bank of China and the China Construction Bank, had shed heavy losses in the previous three days of trading, as banks were most hit by the spreading crisis on the Wall Street.

The benchmark Shanghai Composite Index opened at 2,067.64 points, up 171.81 points. Nearly all the stocks rose to the daily limit of 10 percent at opening.

The rising momentum was maintained in about an hour after the market opened, with the key index repeatedly hitting new highs in trading. It reached a high of 2,074.31 points before 10:20, up about 9.4 percent.

The market surge also came after the Wall Street rallied on news of a possible government rescue plan to create an entity like the Resolution Trust Corp. to absorb banks' bad loans.

Boosted by the overnight Wall Street advance, regional markets in Asia mostly opened higher on Friday.


No comments: