Trading holds near record levels in mainland Chinese stock markets, while Hong Kong volumes ease

Turnover on mainland China exchanges nudged towards a record on Wednesday, with the Shanghai and Shenzhen stock benchmarks notching up a third day of gains this week.

Trading volumes in both markets was 2.15 trillion yuan (HK$2.69 trillion), just shy of the record 2.16 trillion yuan reached on Tuesday. In contrast, the turnover in Hong Kong was HK$160.09 billion on Wednesday, HK$43.55 billion lower than the previous day, as shares dropped on apparent concerns over weakness in US stocks.

At the end of a volatile day, the Shanghai Composite Index closed up 0.63 per cent to 4,974.71 points,  while the Shenzhen Composite Index finished 1.16 per cent higher at 2,918.02  points. It was another record in Shenzhen, while the Shanghai benchmark hit a fresh seven-year high.

“In China's A-share stock market history, liquidity has always been a major driver,” Credit Suisse analyst Vincent Chan said in a report.

Explaining the rise and fall of the mainland indices throughout trading yesterday, Gerry Alfonso, a director of Shenwan Hongyuan Securities, said: “The initial correction was likely driven by investors selling some of their holdings to invest in the new round of IPOs. The market then recovered and we are seeing massive activity in the market, with the stock turnover at around 2 trillion yuan.”

At least nine initial public offerings will come to the mainland market today, followed by 21 offerings early next week.