Shanghai shares closed higher yesterday as market sentiment rose on news that pension funds have started to flow into the stock market and also on progress in the on-going mixed-ownership reform in state-owned enterprises.
The Shanghai Composite Index rose 0.56 percent to 3,286.91 points.
Investor sentiment soared on news that eight provinces and cities have invested the first tranche of 172.15 billion yuan (.8 billion) of pension funds in the stock market, Securities Daily said yesterday.
Joyoung, China's biggest maker of soybean-milk machines, and Yantai Zhenghai Magnetic Material both soared 10 percent. The two companies' interim results showed China's pension fund was their major shareholders in the second quarter.
"The pension funds which flow into the A-share market are going to stabilize the market,"said Li Chao, chief analyst at Huatai Securities.
Investors were also buoyed by progress in mixed-ownership reform in state-owned enterprises.
China Unicom, the country's second-biggest telecom firm, surged by the daily limit of 10 percent to 8.22 yuan (.23) after saying yesterday it planned to draw investors such as Alibaba Group, Tencent Holdings and Baidu under its reform.