Bull market momentum builds up in China stocks as benchmark and turnover surge to multi-year highs

Name: Two Sessions 2020: China sets no GDP target for first time, defence spending growth slows
Uploaded: 2020-07-06T10:29:18.000Z
Duration: 2 min 18 s
Description: Two Sessions 2020: China sets no GDP target for first time, defence spending growth slows

Shanghai Composite Index rises 5.7 per cent to a two-year high

Combined daily turnover on Shanghai and Shenzhen bourses hit a five-year high of US$213.2 billion

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A pedestrian walks past the Bund Bull statue in Shanghai. Chinese stocks made rapid gains on Monday. Photo: Bloomberg

Zhang Shidong

Published: 6:29pm, 6 Jul 2020Updated: 6:29pm, 6 Jul 2020

Bull-market signs are flashing up everywhere in China’s stocks: the benchmark has risen to a multi-year high, turnover is surging and even the state media has got in on the act, talking up the momentum.

A 5.7 per cent surge in the Shanghai Composite Index, led by brokerages and banks, pushed the gauge to a two-year high on Monday, with the combined turnover on the Shanghai and Shenzhen exchanges hitting a five-year high of 1.5 trillion yuan (US$213.2 billion).

China Securities Journal, a newspaper affiliated with Xinhua news agency, said in a front-page commentary that a further run-up is expected because of favourable government policies.

Technically, the Shanghai Composite has been in bull territory since March last year after a 20 per cent gain. Still, sentiment remained lacklustre then, as investors’ appetite for equities shrank with the government scaling back loosening policies. At the height of the coronavirus outbreak early this year, the index had plunged by as much as 19 per cent, almost slipping into a bear market.

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Two Sessions 2020: China sets no GDP target for first time, defence spending growth slows

Buying interest has been accelerating recently, as China’s economy has been recovering from its first ever quarterly contraction and policymakers have been unleashing a record amount of liquidity to support growth. Adding to a slew of loosening monetary policies was the latest move by the central bank to cut the discount and re-lending rates for the first time in a decade, which investors have interpreted as a sign of further easing.

Bull market momentum builds up in China stocks as benchmark and turnover surge to multi-year highs

Shanghai Composite Index rises 5.7 per cent to a two-year high Combined daily turnover on Shanghai and Shenzhen bourses hit a five-year high of US$213.2 billion

Shanghai Composite Index rises 5.7 per cent to a two-year high

Combined daily turnover on Shanghai and Shenzhen bourses hit a five-year high of US$213.2 billion