SHANGHAI (Dow Jones)--China's shares ended slightly higher Wednesday due to bargain hunting in real-estate developers and financial companies, but lingering concerns about potential policy tightening limited gains.
The benchmark Shanghai Composite Index, which tracks both A and B shares, ended up 0.3%, or 8.14 points, at 2655.71. The Shenzhen Composite Index fell 1.2%, or 12.41 points, to 1012.24.
The market changed directions several times during the session, and analysts said they expect the Shanghai index to trade in a 2600-2700 range for the rest of the week as investors await cues from possible policy changes and new developments in Europe's debt crisis.
"The fluctuating market pattern and shrinking trading volume show investors have little conviction (about the market)," said Shen Yang, an analyst at Orient Securities. "But the market seems to be nearing bottom and investors are waiting for entry points."
Trading volume for the Shanghai Composite Index fell to CNY72.06 billion ($10.55 billion) from CNY104.27 billion Tuesday.
Property companies rose due to bargain hunting after recent declines. Gemdale rose 2.3% to CNY6.22, after having fallen 2.56% Tuesday. Poly Real Estate Group ended up 3.6% at CNY11.04 after falling 2.7% the previous day.
Simon Wang, an analyst at Xiangcai Securities, said the real-estate sector is a good gauge of investors' sentiment.
"The key (for many investors) now is whether the government will launch new tightening measures in the real-estate sector," he said, adding the market will likely improve markedly once real-estate firms post sustained gains.
Banks also benefited from bargain hunting. China Merchants Bank ended up 2.4% at CNY13.65 after falling 1.9% Tuesday. Pudong Development Bank rose 2.1% to CNY19.15 after falling 1.2% during the previous day.
Renewable-energy companies bucked the broader market's rise due to rotational selling, said Zhang Gang, an analyst at Southwest Securities.
"Renewable-energy companies have been relatively stable amidst the broader market's recent declines, so that led some investors to book profits in the sector," Zhang said.
Energy-saving curtain maker China Fangda Group fell by the 10% daily limit to CNY10.85. Battery producer Shenzhen Desay Battery Technology also fell 10% to CNY20.17.
