[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Thursday, 7 June 2007, 08:09 GMT 09:09 UK
Tax reprieve lifts Chinese shares
Investors check stock prices at a securities company in Shanghai
The Chinese government has curbed some popular enthusiasm for shares
Chinese shares have rebounded after a media blitz by the Beijing government calmed fears of another market tax.

The Shanghai Composite Index closed 3% up at 3,890.8 points after official news sources refuted a rumoured plan for a capital gains tax on stocks.

The number of new share accounts being opened in China's frenetic stock market fell sharply last week and Beijing is concerned to prevent further cooling.

That fall came after the tax on share purchases was increased to 0.3%.

State intervention

The government has been keen to damp down the enthusiasm of private investors who have been transferring personal savings into share accounts at an alarming rate.

But in the last few days, a succession of stories in the state-owned media indicated that Beijing does not wish to see another sharp drop in the market.

In particular, regulatory authorities were quoted in a Shanghai newspaper as saying that rumours that the government planned to introduce a capital gains tax were "baseless."

The shares rally is being attributed to institutional investors returning to the market to buy benchmark stocks.


MARKET DATA - 11:36 UK

FTSE 100
5429.64up
23.70 0.44%
Dax
5733.05up
19.54 0.34%
Cac 40
3784.02up
14.48 0.38%
Dow Jones
10403.79up
78.53 0.76%
Nasdaq
2273.57up
35.31 1.58%
S&P 500
1115.71up
11.22 1.02%
BBC Global 30
5707.15up
20.65 0.36%
Data delayed by at least 15 minutes


RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites



FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

PRODUCTS & SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific