Stocks rise on a new round of financial stimulus
After the government announced a fresh financial stimulus to boost its economy, Chinese stocks rose to a 3-week high level.
The benchmark Shanghai Composite Index edged up 1.84 percent, which was 36.09 points, to close at 2001.5 on Nov.4. And the turnover on the bourse reached the highest point since May 9, which ballooned to 125.7 billion yuan from Wedesday’s 90.7 billion yuan. The smallest Shenzhen Component Index finished at 7130.9, which jumped 1.28 percent, or 89.86 points.
A senior analyst at CITIC China Securities Dong Chen said, “I will still take it as rebound rather than a V-shape reverse, thanks to the government’s intensive launch of heart-stirring news.”
Late on last Wednesday, the State Council listed nine areas in a statement in which interest rates, liquidity policy and the exchange rate would be used to back up the economy. And this year, another 100 billion yuan will be provided to three policy banks.
At the same time, by purchasing shares at the Shanghai Stock Exchange, Central Huijin, an arm of the leading wealth fund, has raised its holdings of China Construction Bank (CCB), Bank of China (BOC) and Industrial and Commercial Bank of China (ICBC). From the statistics of Sept 23 to Nov 28, we could see that Central Huijin has invested 763 million yuan to ICBC, 177 million yuan to BOC and 277 million yuan to CCB, which has helped to stabilize the market.
The rebound of the financial stocks yesterday is one of the best performers. Ping An Insurance rose 7.52 percent to 25.75 yuan, China Life Insurance advanced 5.4 percent to 19.92 yuan, while ICBC was up 2.33 percent and CCB 3.06 percent.
Reviews are positive toward the government policies and they are attracting money back into equities, according to Dong. However, he also noted that it is still not clear for the China’s economy which fundamentally determines the situation of the stock market. He said, that depends on the speed of recovery of the global economy, especially the US.
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