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DJ China Shares End Higher; Central Bank Continues Cash Injections
December 24, 2013

SHANGHAI--China shares ended higher on Tuesday after the central bank continued to inject cash into the money market to ease liquidity. The benchmark Shanghai Composite Index, which tracks both A and B shares, ended up 0.2%, or 3.20 points, at 2092.91. The Shenzhen Composite Index rose 0.9%, or 9.21 points, to 1034.79. The People's Bank of China earlier on Tuesday injected 29 billion yuan ($4.8 billion) into the banking system through an offering of seven-day reverse repurchase agreements, traders participating in the open-market operations said. "The PBOC's cash injection helped improve liquidity conditions temporarily," Dongxing Securities investment adviser Sun Zheng said. "But I'm still cautious about the funding-cost outlook which could stay high until the first quarter of 2014." A technical rebound in China shares--which have lost 7% in the past two weeks--was another reason for the rise, analysts said. "The market is restoring from a slump last week--an over reaction to a cash crunch--after the regulators moved to stabilize the sentiment," Northeast Securities analyst Du Changchun said. Among the day's biggest gainers were Guangdong-based companies after its provincial government was reported by the Shanghai Securities News to have submitted a proposal to the Cabinet for a free-trade zone covering Guangdong, Hong Kong and Macau. Shenzhen Yan Tian Port jumped 7.9% to CNY6.40, Guangzhou Baiyun International Airport gained 4.1% to CNY7.11 and Zhuhai Port rose 4.1% to CNY5.54. Telecom stocks rose on expectations of higher revenue from 4G mobile networks. Earlier this month China issued 4G licenses to China Mobile, China Unicom Hong Kong and China Telecom. Datang Telecom Technology gained 5.2% to CNY13.44, Huaxing Chuangye Communications jumped 7.0% to CNY13.33 and ZTE gained 1.6% to CNY13.94. Drug makers fell on profit-taking. Shandong Lukang Pharmaceutical lost 4.8% to CNY5.34 after rising 6.3% in the previous two sessions and Anhui Anke Biotechnology declined 5.4% to CNY16.74 following a 16% gain between Friday and Monday. Large banks started to retreat on lingering concerns about their ability to manage liquidity in tight monetary conditions. ICBC ended flat at CNY3.58, China Construction Bank lost 0.7% to CNY4.14 and Bank of China slid 0.4% to CNY2.65. Write to Rose Yu and Amy Li at rose.yu@dowjones.com