SHANGHAI May 31 China stocks ended higher on
Wednesday, but the bulk of early gains were erased as investors
sought to weigh the impact of new trading rules on bulk selling.
The blue-chip CSI300 index closed up 0.4 percent,
at 3,492.88 points, while the Shanghai Composite Index
added 0.2 percent to 3,117.18 points.
During May, the SSEC lost 1.2 percent, its third straight
monthly loss, while the CSI300 gained 1.6 percent.
Both main indexes jumped in early morning trade, as
investors cheered government rules to restrict "intensive" and
"viscous" selling by shareholders, but the initial euphoria
quickly evaporated as investors contemplated the rules' side
Regulators' intention is to prevent massive selling of
shares and to stabilize the market. But for shareholders with no
intention to sell, the rules "would prod them to sell sooner,
for fear sales restrictions would only become tougher in
future," said Wang Yu, strategist a Pacific Securities.
Echoing that view, UBS strategist Gao Ting wrote:
"The new regulations could be easily interpreted as
stabilizing the market in the short term ... However, we don't
think this is a decisive factor that could determine
medium-range movements in the stock market."
A Reuters poll also found Chinese fund managers kept their
suggested equity exposure for the next three months unchanged
from the previous month, reflecting widespread caution amid
tighter regulations and liquidity conditions.
For the day, sentiment was somewhat lifted by an official
survey showing China's manufacturing sector grew faster than
expected in May.
(Reporting by Luoyan Liu and John Ruwitch; Editing by Richard