| Chinese stocks rise to record hight on Thursday |
SHANGHAI, July 26 (AP) -- China's roller-coaster stock markets surged to a new high Thursday, boosted by expectations of stronger corporate profits despite government efforts to cool the sizzling economy.
The benchmark Shanghai Composite Index rose 22.49 points, or 0.52 percent, to close at 4,346.46, breaking its previous record set May 29. The Shenzhen Composite Index for the country's second, smaller market rose 1.5 percent to 1,231.65.
The Shanghai index has risen more than 62 percent so far this year and 14 percent since the start of July _ after more than doubling in 2006.
But the market has taken investors on a wild ride as regulators tried to rein in a boom in prices that has drawn a flood of new money into the market.
After the Shanghai index hit a then-record of 4,334.92 on May 29, the market plunged after regulators raised a trading tax the following day. The index fell 15 percent before climbing back up to the current level.
It also plunged in late February, only to bounce back within a few weeks.
Thousands of first-time Chinese investors have poured into the markets in recent months, tapping savings and mortgaging their homes to buy stocks in hopes of getting a better return in an economy that offers few other investment opportunities.
Investors have been upbeat about corporate earnings despite repeated government efforts to contain China's surging economy, which expanded by 11.9 percent last quarter, its fastest quarterly growth since 1995.
The government raised interest rates Friday for the fifth time since April 2006. It is trying to restrain the growth of exports and investment, worried that runaway spending in some industries could push up inflation or ignite a debt crisis.
"Investors bought equities heavily after a number of companies issued rosy forecasts for their first-half earnings. But significant rises in stock prices have been eating up potential gains," said Zhang Yuheng, an analyst at CSC International Holdings.
Markets rallied despite a government decision to make keeping money in the bank more attractive by raising interest rates on deposits and cutting tax paid on them.
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