China stocks extend gains as Beijing dismantles zero-Covid with border reopening in early January
- The National Health Commission will scrap quarantine requirements for all arrivals from January 8 in a major shift to zero-Covid policy
- Onshore stocks extended gains while major financial markets in the region were closed for a public holiday
The Shanghai Composite Index climbed 1 per cent to 3,095 at the close of Tuesday trading, following a 0.8 per cent gain on Monday. The CSI 300 jumped 1.2 per cent to 3,887.85. Financial markets in Hong Kong are closed for a public holiday. Benchmarks in South Korea, Japan and Taiwan advanced by at least 0.5 per cent.
Jiangsu Lianyungang Port, Tianyang New Materials Shanghai Technology and Liaoning Dingjide Petrochemical all surged by 10 per cent. Xiamen Airport added 1.7 per cent while China Southern Airlines gained 0.5 per cent.
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“Aviation, airports, tourism, and hotels that benefited from the reopening theme performed well in early trading on the news,” said Kenny Ng Lai-yin, a strategist at Everbright Sun Hung Kai Securities. “Gains have narrowed, as investors have already had certain expectations for this move.”
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The move is a significant departure since the government began dismantling its uncompromising curbs in November, including citywide snap lockdowns that angered local residents.
Rolling back its punishing regimen has helped deliver a 6.9 per cent increase in the Shanghai Composite Index since the gauge hit a multi-year low on October 31. The index has still declined 15 per cent this year, after a 5 per cent gain in 2021.
Commodity, biotech and utility companies also profited on the news. Sino-Platinum Metals rose 10 per cent, Shanghai Haohai Biological gained 20 per cent and Heilongjiang Interchina, a water treatment company, added 9.9 per cent.
Three companies debuted in Shenzhen. Huaxia Hangzhou Heda Hi-Tech rose 8.9 per cent to 3.06 yuan. Yili Chuanning Biotechnology doubled to 10.05 yuan, while Zhejiang TongLi Transmission rose 5.9 per cent to 39.20 yuan.
Additional reporting by Li Jiaxing
