The Shanghai Composite Index marked its seventh consecutive day of gains on Thursday, closing at 2,988.36 points, just shy of the significant 3,000-point psychological threshold. The index rose by 1.27 percent, signaling renewed investor confidence in the Chinese mainland’s stock market.
The sustained rally has been fueled by a combination of policy support from regulators and increased inflows from long-term investors. Earlier this month, the China Securities Regulatory Commission (CSRC) announced a suspension of new securities lending and encouraged mergers, acquisitions, and restructuring among listed companies. These measures aim to stabilize the market and promote healthy growth.
In a series of meetings held on February 18-19, the CSRC engaged with experts and market participants to explore strategies for further improving the capital market. Participants emphasized the need for both immediate actions to boost investor confidence and long-term reforms to enhance market resilience.
“The current stock market requires continuous efforts to stabilize expectations in the short term and promote vigorous long-term institutional reform and construction,” said Wu Xiaoqiu, dean of the National Finance Research Institute at Renmin University of China.
Tian Xuan, associate dean at the PBC School of Finance of Tsinghua University, highlighted the importance of improving investment returns to enhance investor confidence. “Prioritizing improvements in listed company quality is key to driving investment,” he noted.
Global investors are taking notice of the market’s upward momentum. U.S. asset managers are positioning themselves for a potential recovery, viewing Chinese equities as an attractive opportunity due to historically low valuations. “It’s a once-in-a-lifetime opportunity to acquire Chinese equities,” Jonathan Krane, CEO of KraneShares, told Reuters.
Adding to the positive sentiment, China announced a greater-than-expected cut in key mortgage rates on Tuesday, providing further encouragement to investors. Chen Jiahe, chief investment officer at Novem Arcae Technologies, told CGTN that while lowering interest rates is one of several monetary tools available, more targeted fiscal policies could be more effective in fine-tuning the economy. “They can be directed towards specific industries requiring development,” he added.
As the Shanghai Composite approaches the 3,000-point mark, market participants remain optimistic about the potential for continued growth, supported by regulatory measures and an improving economic outlook.
Reference(s):
Shanghai Composite Index rise for a 7th day, nearing 3000 points
cgtn.com
