China’s stock market rallies on aggressive stimulus measures

Chinese stocks continued their impressive rally on Monday, extending their gains for the month and positioning themselves for the best performance in nearly a decade.

This surge is fueled by Beijing’s aggressive stimulus measures aimed at arresting the economic slowdown.

The CSI300 blue-chip index surged over 6.22 per cent, building on its strong performance last week, which marked the best weekly gain in nearly 16 years.

The Shanghai Composite Index jumped 5.7 per cent, and Hong Kong’s Hang Seng Index rose 3.34 per cent.

Property stocks experienced significant gains following the announcement by China’s central bank to lower mortgage rates for existing home loans.

This, coupled with the easing of restrictions on home purchases in cities like Guangzhou, Shanghai, and Shenzhen, has boosted investor confidence in the beleaguered property market.

Analysts believe that the market is still surprised by the extent of China’s policy support and that the positive momentum is likely to continue. Kenny Ng, strategist at China Everbright Securities International, noted the ongoing market optimism.

Mainland-listed property stocks surged by 6.4 per cent, while the Hang Seng Mainland Properties Index climbed 8.4 per cent. Consumer staples stocks also saw a significant increase, trading up 7 per cent. The smaller Shenzhen index soared by 8.2 per cent.

For the month, the CSI300 index was poised for a gain of over 18 per cent, the best performance since December 2014. The Shanghai Composite Index was on track to end September with a 14.8 per cent increase, the highest since April 2015.

The Hang Seng Index was set for its best monthly performance since November 2022, with a 14.7 per cent rise.

The recent stimulus measures, which include outsized rate cuts and fiscal support, have ignited a rebound in Chinese equities that had been languishing at multi-year lows.

Attribution: Reuters

Subediting: M. S. Salama