Chinese shares recover, volatility eases

Chinese shares closed higher Monday as investors largely digested the impact from an Everbright Securities error.

The benchmark Shanghai Composite Index went up 0.83 percent, or 17.15 points, to end at 2,085.60, and the Shenzhen Component Index rose 1.44 percent, or 117.64 points, to finish at 8,285.72.

The Chinese stock market unexpectedly soared Friday morning after big purchase orders sent from Everbright Securities Co., Ltd. The stock index fell sharply in the afternoon after the brokerage said it had a problem with its system, causing the error.

Trading of Everbright shares remained suspended on Monday. Everbright also said in an announcement that it would not sell shares purchased as a result of Friday's error until further notice.

Combined turnover on the two bourses shrank to 177.2 billion yuan (28.9 billion U.S. dollars) Monday from 250.6 billion yuan the previous trading day.

Chinese electronic and information shares led the gains, with the sub-index for the sector up 4.64 percent. Shares of printing and packaging companies as well as furniture firms were also among the biggest gainers.

The financial sector was the only loser, with the sub-index down 0.71 percent.

Everbright Securities, which is under fire, made another mistake on Monday. It offered to sell 10 million yuan of treasury bonds at a yield of 4.20 percent. The yield was 25 basis points higher than the market's evaluation.

Everbright said the offer has been taken up and it is negotiating with the counterparty to properly handle the accidental case.