Shares in Shanghai surged by 9.29 per cent yesterday - their biggest daily gain for six-and-a-half years - as cuts in the tax on share trading announced late on Wednesday to boost investor confidence took effect. The composite index closed 304.7 points higher at 3,583.028.

More than half of the 888 companies listed in Shanghai rose by 10 per cent, the maximum allowed by exchange rules. That suggests buyers' demand for shares may have been unsatisfied yesterday, and that the market could rise further today.