China markets close up, record first month of gains since start of coronavirus outbreak

Stocks listed on mainland Chinese exchanges rose on the last trading day of April, with the Shanghai Composite Index gaining 4 per cent for the month in a welcome change from March’s declines.

The benchmark joined other indices in the Asia-Pacific region in recording its first month of gains since the outbreak began, as sentiment improved on positive news around potential treatments and the end of lockdowns.

The Shanghai Composite closed up 1.3 per cent higher at 2,860.08 on Thursday. In March, the gauge fell about 4.5 per cent and remains 6.2 per cent down year to date. The CSI 300 gauge of large caps listed in Shanghai and Shenzhen gained 1.2 per cent to 3,912.58 and the technology focused ChiNext rose 1.9 per cent to 2,069.43.

The China markets will be on holiday on Friday, as well as Monday and Tuesday next week. Hong Kong will also be shut on Friday.

Transport stocks led the rally on the mainland, with the country looking forward to a pick up in domestic travel over the long Labour Day weekend that starts on Friday and runs through to May 5.

The shares of China’s three big state-run airlines have risen thanks to a pick up in domestic flights ahead of the national holiday, according to Bloomberg. The carriers lost a combined 14 billion yuan (US$1.97 billion) in the first quarter as a result of the virus. China Southern Airlines lost 5.3 billion yuan and China Eastern Airlines lost 3.9 billion yuan, while Air China posted a loss of 4.8 billion yuan for the period.

The carriers were adding capacity ahead of the national holiday. In the past two months, more than 30 per cent of domestic capacity has come back online, according to Cirium. Aviation stocks rose 4.4 per cent on Thursday, according to gauges tracked by EastMoney.

China Railway also said that it would operate about 700 additional passenger trains, or 5,700 trains daily in total, starting from Thursday until May 5, as part of plans for the Labour Day holiday. It would also operate 30 more high-speed sleeper trains for overnight travel from Beijing, Shanghai, Shenzhen and Guangzhou, among other locations in the country.

Short and medium distance travel was expected to pick up as China’s coronavirus situation continues to improve, the railway group said in an announcement on its website. Its shares traded up 3.2 per cent at 5.86 yuan on Thursday.

Meanwhile, in Australia, which is battling its worst recession in decades, the S&P/ASX200 closed 2.4 per cent higher to rise 8.8 per cent in April, its first month of gains since February. Singapore’s Straits Times Index was last trading 2 per cent higher. The country has the most coronavirus cases in Asia, behind only China and India.

In Tokyo, the Nikkei 225 closed up 2.1 per cent, and has risen 6.7 per cent this month. Japanese Prime Minister Shinzo Abe said on Thursday that his government will consult experts to decide whether to extend the country’s state of emergency beyond May 6, according to Reuters. In New Zealand, the S&P/NZX50 fell 1.3 per cent at the close, but has risen 7.5 per cent in April.