CHINESE shares gained more than 2 percent in active trade yesterday, as hopes of more steps to support the market from the government spurred rallies in large-cap banking and energy shares.

    A report in China Daily said market regulators had pledged to speed up approvals for quotas for Qualified Foreign Institutional Investors (QFIIs), the only way for offshore investors to directly access China’s domestic markets.

    “A lot of investors are underweight China in their portfolios so any talk on QFII is likely to encourage them to start getting involved again,” said Tom Kaan, a director at Louis Capital Markets in Hong Kong.

    The CSI300 index of top Shanghai and Shenzhen listings rose 2.4 percent while the Shanghai Composite rose nearly 2 percent.

    The report of more reform comes after Chinese regulators cleared the way for overseas investors to buy more than US$30 billion worth of stocks and bonds in China, exceeding the previous program limit, as the government seeks to attract more foreign portfolio investors.

    It also comes amid speculation of more government funds being put to work to boost investor confidence.

    China’s largest listed broker Citic Securities rose 3.1 percent in Shanghai. Industrial Securities rose 10 percent, the biggest gainer on the CSI300, while Haitong Securities rose 3.7 percent.

    In a sign of returning risk appetite, shares of China Molybdenum Co. Ltd. nearly tripled after listing in Shanghai before trading was suspended.

    But there was no respite for ZTE Corp. shares which extended losses to fall 4.9 percent after a U.S. congressional report said the company could pose a security threat dashing hopes of expansion plans.

    ZTE shares are down 10.6 percent since last Friday’s close.

    Hong Kong shares rose to a five-month high yesterday. Chinese banks and oil producers, which carry the biggest weightings in the local benchmark indexes, lifted the China Enterprises index 2.1 percent higher.

    (SD-Agencies)