KEY POINTS:
China's stocks climbed last night, cutting some of Tuesday's losses, after official media reports said the Government would not impose capital gains taxes on stocks and would let overseas investors buy more domestic equities.
China United Telecommunications and China Yangtze Power, owner of the world's biggest hydropower project, led gains among stocks that had plunged amid concerns that a Government crackdown on investments with borrowed money would end a rally that drove benchmarks to records.
"Confidence is regaining now after the rumours that hit the market yesterday," said Lu Yizhen, who helps manage about US$640 million ($912 million) at Citic-Prudential Fund Management in Shanghai.
"For the long-term, China's stocks still point to an upside trend."
The Shanghai and Shenzhen 300 Index, which tracks yuan- denominated A shares listed on China's two exchanges, advanced 3.5 percent to 2544.57 last night. It earlier fell as much as 1.8 per cent. The measure plunged 9.2 per cent on Tuesday, the most since 1997.
The Shanghai Composite Index rose 3.9 percent to 2881.07, while the Shenzhen Composite Index gained 3.8 percent to 736.81.
- BLOOMBERG
