Shanghai stocks rebounded yesterday amid investor enthusiasm in the real estate sector.
The Shanghai Composite Index rose 0.6 percent to 2,998.17 points.
The real estate sector in general gained 2.23 percent. Beijing Dalong Weiye Real Estate Development Co jumped the daily limit of 10 percent to 5.81 yuan (87 US cents), as did Huayuan Property Co to 5.16 yuan.
"Investor sentiment was boosted by a surge in house prices over the past few months," Zhao Huan, chief strategic analyst at Fortune Securities, said. "Reflected in relevant companies, their market value was boosted by attracting more capital."
Real estate companies profited from buying enthusiasm. In the first half, mainland-listed companies in the real estate industry reported a 44.6 percent jump in sales and 40 percent growth in profit, according to the National Institution for Finance and Development.
The market value of real estate industry was driven by investors injecting capital into it, which has risen over fourfold the value of gross domestic product in China, Haitong Securities said in a note recently.
"That would heavily raise the risk of investment," Zhao said. "But it also means the boom in real estate stocks would last for a while."
