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Chinese stocks extended one of their most remarkable turnarounds in history, soaring for a ninth straight day as government stimulus entices investors back to one of the most beaten-down markets worldwide.
The CSI 300 Index jumped as much as 7,7 percent yesterday, the most since 2015, as traders rushed to buy shares in the last session before a week-long holiday.
The index, which lost more than 45 percent of its value from a 2021 high through mid-September, has since soared more than 20 percent — heading for a technical bull market. Its rally last week was the biggest since 2008.
The extended gains came after three of China’s largest cities relaxed rules for homebuyers, while the central bank also moved to lower mortgage rates.
The latest measures were among the key elements of a sweeping stimulus package released today that also included interest rate cuts, freeing-up of cash for banks, as well as liquidity support for stocks.
Having faced several false dawns in recent years, investors may be betting that the current momentum may be sustainable.
In a sign of continued frenzy, combined turnover on both the Shanghai and Shenzhen bourses exceeded 1,6 trillion yuan (US$228 billion) in the morning session, exceeding the total value of shares that changed hands Friday.
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“The pace of the turnaround is clearly reflective of how oversold the market was,” said Charu Chanana, global markets strategist at Saxo Markets. — Bloomberg.
Bongani Ndlovu
Online Reporter