Mainland shares bounce back 3.9pc from the sharpest fall in decade after officials rule out plans on capital gains
Mainland stocks rebounded yesterday from their biggest fall in a decade as investors hunted for bargains after the government said it had no plans to introduce a capital gains tax on stock earnings.
While other Asian markets, including Hong Kong, continued the slide triggered by the Shanghai Composite Index's 8.84 per cent dive on Tuesday, the index rose 3.94 per cent to close at 2,881.073 points, in a clear sign of continuing bullish sentiment.
In state-owned press reports yesterday, officials denied rumours the government planned to introduce a capital gains tax on stock transactions.
The China Securities Regulatory Commission also said it had no plans to set up a unit to investigate trading irregularities.
'There are already two departments in the CSRC responsible for investigating violations and along with the local-level investigative authorities these are sufficient to deal with any problems that arise,' spokesman Liu Fuhua said.
These rumours, along with massive mutual fund redemptions and expectations of an imminent interest rate rise, fuelled Tuesday's panic selling that helped push more than 900 of the 1,350 or so A-share companies down by their daily 10 per cent limit. 'This is a normal correction after China's stock market rose too fast in the past months,' CSRC director Zhu Jian said in a Bloomberg interview.
