Chinese shares claw back losses

The central bank wants a market where big firms play a central role

Chinese shares closed higher, despite a weak opening, following Wednesday's tripling of share trading tax.

Chinese authorities decided to increase the tax from 0.1% to 0.3% in an attempt to clamp down on speculative trading.

The Shanghai Composite Index closed 56.57 points or 1.4% higher at 4,109.65 having earlier dropped below 4,000.

Larger companies led the rises after comments from the central bank were taken to mean that they might be less affected by the clamp down.

A report from the central bank said it wanted to develop a stock market where larger companies, known as blue chips, played a leading role.

Market confidence

Pudong Development Bank rose to its 10% daily limit, as did the oil refining giant Sinopec.

Societe Generale showed confidence in the Chinese market by applying to double the amount it is allowed to invest in it.

Pascal Sefrin, general manager of the French bank's Shanghai branch, said it had used up its initial quota under the Qualified Foreign Institutional Investor programme.

"Our quota at present is $50m (£25.3m) and we are applying to double it," he said.