By Ding Qi (chinadaily.com.cn)
Updated: 2007-11-14 16:26

Chinese stock market on Wednesday embraced its biggest rise in nearly three months as blue chips shined to push the Shanghai index up 254.58 points.

The benchmark Shanghai Composite Index recovered from a stormy Tuesday ending with an 88- point high open in morning trading. After a minute correction around 11 AM, major blue chips swept through and pushed the market to a bullish close. The Shanghai index concluded at 5,412.69 points, up 4.94 percent from Tuesday, the largest daily gain since August 20.

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The Shenzhen market enjoyed a sunny day with the Shenzhen Component Index edging up 3.63 percent to 17,355 points.

Trading value of the two bourses totaled 128.6 billion yuan (US$17.31 billion). Turnover remained low as investors became more cautious after heart wrenching corrections of the past weeks and in fear of further tightening measures given the red-hot CPI figures released yesterday.

However, most blue chips can't wait to revenge today after drastic losses over the past two weeks. PetroChina surged 5 percent following successive declines since its record IPO. Air China rose 9.52 percent to reach above 20 yuan. Baoshan Iron & Steel, and property giant Vanke, despite having climbed lower, also contributed with rises of more than two percent.

The energy and nonferrous metal sectors lessened previous losses from news of an incoming resource tax hike plan with powerful rebound today. Shenhua Energy went back to 70 yuan, gaining 9.94 percent after losing almost 20 yuan since the end of last month. Chalco, the nation's leading aluminum producer, also wound up some gloomy days with a limit up to 38.29 yuan per share.

Shares of paper makers also reaped notable gains echoing recent continuous appreciation of the renminbi against the US dollar. Yueyang Paper Industry led the sector with a 9.06-percent gain.

Surges in the neighboring market may contribute to today's boom, the benchmark Hang Seng Index in Hong Kong surge 1,362 points and finished at 29,166.01 points today. The Nikkei average rose 2.5 percent to 15,499.56, snapping an eight-day losing streak.

Also notable, the overnight US stock market rose sharply with the Dow Jones Industrial Average surging nearly 320 points boosted by a sharp drop in crude oil prices.

However, for stock markets in China, it is still too early to say the rainy days are over. Statistics from Wind Info showed more than 90 percent of the CSI 300 components, the backbone of the whole market, went down in the past two weeks. A further 50 stocks lost more than 30 percent, not easily recovered.

Since the market is still weak, investors should keep patient and save their capitals for better bargains of blue chips, financial portal Hexun.com quoted an analyst from Huiyang Investment Corp as saying.