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Hong Kong, Shanghai stocks extend gains
January 22, 2014 , 4 : 12 pm GST
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Dow Jones Industrial Average Dips Lower After Opening Of Trading. Photo - AFP
Shares in Hong Kong and Shanghai rose on Wednesday, extending gains from the previous session after China's central bank injected fresh capital into financial markets to avert a cash crunch.
The benchmark Hang Seng Index in Hong Kong added 0.21 per cent, or 49.13 points, to 23,082.25 on turnover of HK$71.44 billion ($9.20 billion).
The People's Bank of China (PBoC) injected 255 billion yuan ($42 billion) into the interbank market on Tuesday to free up capital ahead of the Chinese New Year, its most aggressive steps in nearly a year to head off concerns of a cash crunch on the mainland.
The move came a day after it provided liquidity to commercial banks to tamp down rising interbank lending rates.
Tuesday's move raised hopes of a similar action later in the week.
"The PBoC's move was a strong signal to the market not to be overly bearish, though we have to bear in mind its moves are short - term in nature," Soochow Securities analyst Deng Wenyuan told Dow Jones Newswires.
Heavily weighted financial stocks in the Hang Seng Index continued to bounce back, with Industrial & Commercial Bank of China shares rising 1.5 per cent to HK$4.98, while China Construction Bank gained 1.3 per cent to HK$5.62.
Shanghai's benchmark composite index surged 2.16 per cent, or 43.44 points, to 2,051.75 on turnover of 84.1 billion yuan ($13.9 billion).
"The impact of the capital injection may last for a few days, and with controls on new listings keeping the market from becoming unsustainably exuberant, investors are becoming more willing to park their money in the stock market," said Zhang Yanbin, an analyst at Zheshang Securities.
Property developers led the gains on hopes China's urbanisation push will drive demand.
Gree Real Estate surged by its 10 per cent daily limit to 8.68 yuan and Poly Real Estate advanced 7.29 per cent to 8.09 yuan.
Shares linked to Shanghai's free - trade zone rose after a report that the central government would approve similar projects in other cities.
Shanghai Waigaoqiao Free Trade Zone Development jumped 6.91 per cent to 34.04 yuan and commercial property manager China World Trade Center gained 5.94 per cent to 10.17 yuan.
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