Chinese stocks set records as Beijing stimulus fuels US$1.8 trillion rush into bull market
Trading volume hit an all-time high in Hong Kong, erasing Friday’s record; combined turnover in Shanghai and Shenzhen reached an unprecedented level
The Hang Seng Index surged 2.4 per cent to bring the rally in September to 17 per cent, the best month since November 2022. The Shanghai Composite Index advanced 8.1 per cent and 17 per cent for the month, the most since April 2015.
Some HK$505.8 billion (US$65.1 billion) worth of shares changed hands, breaking the record set on Friday. Combined turnover on the Shanghai and Shenzhen exchanges rose to an all-time high of 2.6 trillion yuan (US$370.6 billion), more than double China’s total foreign direct investment last year.
“We expect the near-term momentum to continue ahead of the actual fiscal response given improved market sentiment and low positioning,” said James Wang, head of China strategy at UBS in Hong Kong. “A combination of support for consumption and for local government financing would be most well-received by investors.”
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Today’s rally extended a euphoria since September 24 when Beijing unleashed its boldest stimulus package to help end a housing market slump, which began from the “three red lines” clampdown on developers in August 2020. Some US$1.8 trillion has been restored on the three exchanges since then.
The three major stock markets are now firmly in bull-market territory. The Hang Seng Index has risen more than 20 per cent from its lowest point in August, while the gauges in Shanghai and Shenzhen reached that milestone from their lows earlier this month.
